June 10, 2020

CFPB offers NAFCU-sought clarity, FAQs on TRID

CFPBThe CFPB Tuesday released additional guidance – via a factsheet and additional FAQs – for its Truth in Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA) integrated disclosure (TRID) rule. Of note, the factsheet provides NAFCU-sought clarity on what to do when the TRID formula for disclosing title insurance yields a negative number.

In the factsheet section on negative owner's title insurance, the bureau recommends double-checking calculations but acknowledges that there are some instances where the TRID calculation methodology could be correct in disclosing a negative number. It provides an example of rate prices that would yield a negative number.

The factsheet also addresses:

  • disclosure on loan estimate and closing disclosure, specifically explaining lender's title insurance and owner's title insurance;
  • disclosure of simultaneous title insurance on the loan estimate and closing disclosure;
  • differences between state disclosures and TRID disclosure requirements for simultaneous rates; and
  • simultaneous issuance if a seller agrees to pay the amount of the full owner's title insurance premium.

The TRID FAQs have been updated to include lender credits on the total of payments disclosure, the optional signature line, and separating consumer and seller information.

The bureau began releasing TRID FAQs last year following a request from NAFCU. Amid the coronavirus pandemic, the bureau has also issued an interpretive rule providing greater flexibility under TRID and Regulation Z, in order to allow financial institutions to better help consumers obtain access to mortgage credit during the coronavirus pandemic. The rule clarifies that consumers can modify or waive certain required waiting periods set under TRID and Regulation Z rescission rules.

NAFCU has worked with the bureau to obtain more guidance for credit unions and in January recommended areas of the rule to review as the bureau assesses the TRID rule. The association also included additional TRID guidance in its recent recommendations to the bureau's Taskforce on Consumer Financial Law.