As the real estate industry proceeds with implementation of the now-effective TILA-RESPA Integrated Disclosure rule (TRID), a bill designed to assist smaller lending, title and escrow companies with compliance passed the House of Representatives on Wednesday, October 7. The bill, titled the Homebuyers Assistance Act (H.R. 3192), proposes a period in which these parties will not be held liable for unintentional noncompliance prior to February 1, 2016. Introduced in July by Congressman Brad Sherman (D-CA) and Congressman French Hill (R-AR), H.R. 3192 passed by a vote of 303 to 121.
“When a ship is first launched, it’s typical to take it out on a ‘shakedown cruise’ to make sure that everything is working as it should,” Congressman Sherman says in a statement regarding the vote. “These regulations are at least as complicated as the most complex sea-worthy vessel. This bill says there is no retribution for good faith efforts. This is especially important for smaller companies that do not have the resources to quickly comply with new government regulations. This grace period will allow smaller lenders and mortgage companies to better compete in the marketplace and ultimately benefit the consumer.”
The House action comes despite opposition from the White House, which states H.R. 3192 will “unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the nation’s financial stability.” The President’s senior advisors recommended he veto the bill.
“Tonight’s overwhelming bipartisan and veto-proof vote shows that the House of Representatives recognizes the need for consumers to continue to receive a positive and compliant real estate transaction,” says Michelle Korsmo, CFO of the American Land Title Association (ALTA), in a statement after the vote.
The Consumer Financial Protection Bureau (CFPB) recently penned a letter to the industry stating that initial examinations will take into account good faith efforts.
“Examiners will expect supervised entities to make good faith efforts to comply with the Rule’s requirements in a timely manner. Specifically, examiners will consider the institution’s implementation plan, including actions taken to update policies, procedures, and processes; its training of appropriate staff; and its handling of early technical problems or other implementation challenges,” the letter read.
TRID, otherwise known as “Know Before You Owe,” was initially set to take effect on August 1. Amid concerns the transition would coincide with the new school year, the date was extended to October 3.
The bill will next be presented to the Senate for consideration.
