Compliance Blog

Written by JiJi Bahhur, Director of Regulatory Compliance

Bonjour!

The compliance blog has gone international and I am writing to you from NAFCU’s 48^th Annual Conference in Montréal! As many of you may have heard, this has been an exciting week for the entire credit union industry. On Tuesday, NAFCU’s Board of Directors officially announced that NAFCU will be expanding its membership to include federally insured, state-chartered credit unions. This change, effective immediately, is a historic step but rest assured that NAFCU’s staff will continue to provide you the best in federal advocacy, education and compliance assistance. 

Evidently, Washington has been equally exciting as the CFPB has filed a proposal to delay the effective date of the TILA-RESPA Integrated Disclosure (TRID) Rule. The TRID Rule was initially scheduled to become effective on August 1, 2015, but the CFPB is proposing to move the implementation date to Saturday, October 3, 2015. The CFPB faults a failure to comply with the Congressional Review Act, which required the Bureau to submit the rule report to Congress in a timely manner. The proposal, which is scheduled to be published in the Federal Register today, includes a request for public comment on the October 3 extension as well as alternative dates.  Comments are due to the Bureau on July 7.

While the CFPB’s proposed extension of the TRID effective date is a positive development, the Bureau is merely moving the date that credit unions are expected to “flip a switch” as early compliance is not permitted under this proposal.  It is disappointing that the CFPB is not taking this opportunity to display flexibility and ease the transition by allowing for an early compliance period. In addition, credit unions have already begun to inquire whether or not the revised servicing transfer notice and new escrow cancellation notice are included within the scope of the proposed extension. See, revised section 1026.39(d)(5) and section 1026.20(e). Both of these notices are scheduled to become effective on August 1, 2015. While NAFCU has reached out to the CFPB for clarification, the proposal makes no reference to these post-consummation notice requirements so a formal statement from the CFPB is necessary to provide clarity. This issue will be raised in NAFCU’s official comment letter.

Yesterday, in response to the CFPB’s proposal, NCUA Chairman Debbie Matz confirmed that NCUA is still committed to looking at reasonable and good faith efforts of compliance with the TRID rule. Specifically, Matz stated “When the rule becomes effective, NCUA examiners will look for reasonable and good-faith efforts by credit unions towards substantial compliance with the final rule.” Earlier this month, CFPB Director Richard Cordray announced in a letter to congress that the Bureau also intends to consider “good faith efforts” to comply with this complex rule.

NAFCU will continue to urge the CFPB to reconsider its position on early compliance, which will provide valuable time for credit unions to test their systems prior to the implementation date and seek explicit confirmation as to the scope of the delay.

***

NAFCU, CBANC Network Form Strategic Alliance. NAFCU and CBANC Network have partnered to help credit unions share policies, procedures, agreements, and best practices in real time. CBANC’s content is community-driven, with thousands of policy and procedure documents, vendor and product reviews, and Q&A forums. Click here to join and access this helpful compliance resource! CBANC content is peer-to-peer and not reviewed for accuracy by NAFCU; it does not constitute legal advice.