TRID stands for TILA-RESPA Integrated Disclosure. TILA is the Truth in Lending Act and RESPA is the Real Estate Settlement Procedures Act. These acts and the use of their integrated disclosures are in compliance with the Consumer Financial Protection Bureeau (CFPB).
How is TRID Enforced?
Once TRID was established, the question on everyone’s mind was how would the new rules be enforced? The CFPB promised to be sensitive to those who make “good-faith efforts” to comply, but what did that really mean?
Once the TILA-RESPA Integrated Disclosure (TRID) rules were in full effect, anyone in violation of the new rules could expect severe fines and penalties. This begged the question, “How will the enforcement of TRID be handled?”
Thousands of lenders, financial institutions, settlement agents, realtors, vendors and partners still felt the regulations lacked clarity as to how they enforce the TRID rules when they were first put in place. To date, the CFPB has created an Enforcement page on their website which covers many different subjects like warning letters, enforcement actions, and compensation to harmed customers.
Consumer Financial Protection Bureau (CFPB) states that the bureau will be “sensitive” to lenders who make a “good-faith effort” in compliance, and will “not be punitive” when it comes to the enforcement of the rules.
Small Institutions Had The Most Uncertainty
Even with these assurances, small institutions were nervous. Larger institutions were being kept under close watch. The CFPB has supervision of three-quarters of the total market. But this only accounts for about 100 institutions. These large institutions face undeniable scrutiny, but that leaves nearly 8,000 smaller institutions, that are also regulated by the FDIC and Office of the Comptroller of the Currency (OCC), with little direction as to the standards they were being held to.
TRID was different from previous mortgage regulations issued by the CFPB. Under previous changes, not all institutions were affected; the smallest lenders didn’t always have to comply. This wass not so with TRID – even the smallest of institutions regulated by the FDIC and OCC must comply with the new rules. This caused worry among smaller lenders and settlement agents who didn’t have alarge compliance staff to help them navigate TRID. What determines a “good faith effort?” and “How much leeway will smaller institutions be given?”
Clarity from the FDIC and OCC as to how they will enforce the rules can be diffucult to find and digest. Recently, the CFPB added Consumer Financial Protection Circulars to the Compliance section of their website in an effort to ensure federal consumer financial laws are enforced consistently. These circulars were first released in February, 2022, as part of the Consumer Financial Protection Act mandate. They also provide transparency to partner agencies who cooperate with CFPB enforcement actions.
These circulars reflect the addition of TRID rules, amendments, and changes. They explain what lenders must do at every step of the mortgage process to remain in compliance.
Protect Your Business With Easysoft
What does all of this mean for real estate closing agents? It means it is better to be safe than sorry. Don’t risk non-compliance under the hope that your “good faith efforts” will be accepted. There is no need to take on such risk with Easysoft here to help you. Our real estate closing software is 100% TRID compliant. Easysoft is designed specifically for legal professionals and walks you through the closing process so you don’t miss a single step, ensuring accuracy and TRID compliance.