Consumer Financial Protection Bureau Issues Interpretive Rule on Waiver of TRID and TILA Waiting Periods (2024)

Dear Boards of Directors and Chief Executive Officers:

On May 4, 2020, the Consumer Financial Protection Bureau issued an interpretive rule to clarify when consumers can elect to modify or waive certain required waiting periods for some mortgage loans due to the COVID-19 pandemic. The interpretive rule, effective immediately, specifically addresses waivers of required waiting periods under the TILA-RESPA Integrated Disclosure (TRID) rule and the Regulation Z right of rescission rule.1

The interpretive rule provides that the need to obtain funds and not delay closing for reasons related to the COVID-19 pandemic may be a “changed circ*mstance” or “bona fide personal emergency” which would permit borrowers to waive waiting periods under both rules, or permit a credit union to amend some TRID documents.

Under the TRID rule, credit unions generally must provide the Loan Estimate to consumers no later than seven business days before consummation. Members must receive the Closing Disclosure no later than three business days before consummation. Regulation Z provides consumers with a three business day period from consummation to rescind non-purchase credit transactions (such as refinances, second mortgages and HELOCs) secured by the member’s principal dwelling. Borrowers can waive the waiting periods when faced with a bona fide personal emergency for which they require funds immediately.

Although the rule does not require credit unions to inform borrowers of their ability to forego the waiting periods, I encourage you to advise borrowers with a need for immediate access to funds of the right and manner to utilize these waiver provisions. The interpretive rule also provides that credit unions who make certain changes to disclosures for reasons related to the pandemic can still be considered to be acting in good faith under the TRID rule.

Credit unions can find more information about mortgage lending requirements on the NCUA’s Consumer Compliance Regulatory Resources page.

If you have questions about this information, please contact the NCUA’s Office of Consumer Financial Protection at 703.518.1140 or by email at ComplianceMail@ncua.gov. Credit unions can also contact their NCUA regional office or their state supervisory authority.

Consumer Financial Protection Bureau Issues Interpretive Rule on Waiver of TRID and TILA Waiting Periods (2024)

FAQs

Consumer Financial Protection Bureau Issues Interpretive Rule on Waiver of TRID and TILA Waiting Periods? ›

The interpretive rule provides that the need to obtain funds and not delay closing for reasons related to the COVID-19 pandemic may be a “changed circ*mstance” or “bona fide personal emergency” which would permit borrowers to waive waiting periods under both rules, or permit a credit union to amend some TRID documents.

What is the Consumer Financial Protection Bureau's TILA-RESPA integrated disclosure rule? ›

The rule is also known as the TILA-RESPA Rule or TRID. It created new Loan Estimate and Closing Disclosure forms that consumers receive when applying for and closing on a mortgage loan. The Loan Estimate replaced the RESPA Good Faith Estimate (GFE) and the early Truth in Lending disclosure.

Can I waive the 3 day waiting period closing disclosure? ›

A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by § 1026.32 and only if the circ*mstances meet the criteria for establishing a bona fide personal financial emergency under § 1026.23(e).

Does CFPB enforce TILA? ›

In 2010, Congress transferred the “consumer financial protection functions” of the Board to the CFPB as an independent bureau in the Federal Reserve System. The CFPB's Regulation Z, originally based on the Board's Regulation Z, implements TILA.

What is the new 3 day waiting period for CFPB? ›

1. Pre-consummation or account opening waiting period. A creditor must furnish § 1026.32 disclosures at least three business days prior to consummation for a closed-end, high-cost mortgage and at least three business days prior to account opening for an open-end, high-cost mortgage.

What does the TILA RESPA rule not apply to? ›

The TILA-RESPA rule applies to most closed-end consumer credit transactions secured by real property, but does not apply to: HELOCs; • Reverse mortgages; or • Chattel-dwelling loans, such as loans secured by a mobile home or by a dwelling that is not attached to real property (i.e., land).

What are the 4 main disclosures required under TILA? ›

TILA disclosures include the number of payments, the monthly payment, late fees, whether a borrower can prepay the loan without penalty and other important terms. TILA disclosures is often provided as part of the loan contract, so the borrower may be given the entire contract for review when the TILA is requested.

Why do you have to wait 3 days after closing disclosure? ›

This gives you time to review the terms of the deal before you get to the closing table. Many things can change in the days leading up to closing. Most changes will not require your lender to give you three more business days to review the new terms before closing.

What is the waiting period for Trid? ›

Under the TRID rule, credit unions generally must provide the Loan Estimate to consumers no later than seven business days before consummation. Members must receive the Closing Disclosure no later than three business days before consummation.

What would require a corrected closing disclosure and a new 3 business-day waiting period? ›

The requirement for the additional three business-day waiting period once the Closing Disclosure has been delivered applies under three specific scenarios: 1) an inaccurate APR, which violates the established tolerances; 2) the addition of a prepayment penalty; or, 3) a change in the loan product.

Who is exempt from TILA? ›

The Truth in Lending Act (and Regulation Z) explains which transactions are exempt from the disclosure requirements, including: loans primarily for business, commercial, agricultural, or organizational purposes. federal student loans.

What are violations of TILA? ›

Some examples of violations are the improper disclosure of the amount financed, finance charge, payment schedule, total of payments, annual percentage rate, and security interest disclosures. Under TILA, a creditor can be strictly liable for any violations, meaning that the creditor's intent is not relevant.

Who enforces TILA and trid? ›

The Consumer Financial Protection Bureau (CFPB) continues to assess the rule's effect on consumers and industry professionals. Both NAR and CFPB have created resources to help professionals understand and comply with TRID rules.

Can a consumer waive the three business day waiting period prior to consummation? ›

A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by § 1026.32 and only if the circ*mstances meet the criteria for establishing a bona fide personal financial emergency under § 1026.23(e).

How to waive trid? ›

The TRID Rule and the Regulation Z Rescission Rules permit modification or waiver of these waiting periods if a consumer (1) has received the Loan Estimate, Closing Disclosure or the rescission notice (as applicable), (2) has a bona fide personal financial emergency before the end of the applicable waiting period, and ...

What are the exceptions to the Trid guidelines? ›

Most consumer mortgage loan closings are covered. Exceptions include reverse mortgages, open-ended loans such as HELOCS, loans for business, commercial, or agricultural purposes, and loans made to other than natural persons.

What is the purpose of TILA Regulation Z? ›

The Truth in Lending Act (TILA) of 1968 is a Federal law designed to promote the informed use of consumer credit. It requires disclosures about the terms and cost of loans to standardize how borrowing costs are calculated and disclosed.

What is the CFPB loan originator rule? ›

MAR 10, 2023. The mortgage loan originator rules, part of the Truth in Lending Act's Regulation Z, protect homebuyers from anti-competitive practices, like double-dealing or steering activities, that lead consumers into more expensive loans.

What is CFPB's mortgage advertising practices rule? ›

1. General rule. To the extent that an advertisem*nt mentions specific credit terms, it may state only those terms that the creditor is actually prepared to offer. For example, a creditor may not advertise a very low annual percentage rate that will not in fact be available at any time.

What is the CFPB open banking rule? ›

Primarily, the Proposed Rule would require data providers to make available to a consumer or an authorized third party, upon request, covered data in the data provider's control or possession concerning a covered consumer financial product or service that the consumer obtained from the data provider.

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