The Consumer Financial Protection Bureau (CFPB) is standing firm on its Aug. 1 deadline for implementing new mortgage disclosure rules but will grant a good-faith enforcement grace period.
Colgate Selden, who was on the original CFPB team that worked on TILA-RESPA Integrated Disclosure requirements, said the agency still has the ability to cite a company years from now for violating the disclosures, starting with the first day the rule takes effect.
“Enforcement can go in two years from now and see on August 2 that a lender had TRID violations,” said Selden, counsel in Alston & Bird’s Financial Services & Products Group. “Even then, they should not be heavy-handed for early violations, assuming good faith efforts were being made to implement the rule.”
Selden added: “While the CFPB’s enforcement approach for good faith implementers is a positive development, industry should still attempt to fully comply, not only to receive these regulatory oversight considerations, but also reduce private litigation risk. The CFPB’s announcement will likely have no impact on private litigation that could occur based on August 1 violations.”