Compliance Blog

Written by JiJi Bahhur, Director of Regulatory Compliance

In a recent blog post, I discussed pre-consummation changes that would require the credit union to issue a corrected Closing Disclosure to the consumer.  Today, as part of our continued TILA/RESPA blog series, I’d like to now focus on the “other” situations that can trigger the need for a corrected Closing Disclosure. 

Post-Consummation Events

During the 30-day period following consummation, if an event in connection with the settlement of the transaction occurs that causes the disclosures to become inaccurate and results in a change to an amount paid by the consumer, the creditor will be required to provide a corrected Closing Disclosure. In this situation, the creditor must deliver or place in the mail a corrected Closing Disclosure not later than 30 days after receiving information sufficient to establish that such an event has occurred.

Clerical Errors

Clerical errors are also subject to re-disclosure under section 1026.19(f)(2)(iv). Comment 1 to section 1026.19(f)(2)(iv) clarifies that an error is considered clerical "if it does not affect a numeric disclosure and does not affect requirements imposed by § 1026.19(e) or (f)." The commentary also provides a couple of illustrative examples:

"For example, if the disclosure identifies the incorrect settlement service provider as the recipient of a payment, then §1026.19(f)(2)(iv) requires the creditor to deliver or place in the mail corrected disclosures reflecting the corrected non-numeric disclosure no later than 60 days after consummation. However, if, for example, the disclosure lists the wrong property address, which affects the delivery requirement imposed by §1026.19(e) or (f), the error would not be considered clerical."

To correct non-numeric clerical errors, a creditor must deliver or place in the mail a corrected Closing Disclosure no later than 60 days after consummation.

Refunds to Cure Tolerance Violations

Finally, if a creditor provides a consumer with a refund to cure a tolerance violation in connection with the good faith analysis of the estimated closing costs, the creditor must deliver or place in the mail a corrected Closing Disclosure that reflects the refund no later than 60 days after consummation.

Stay tuned!  NAFCU’s TILA/RESPA blog series will continue to break-down sections of the rule over the next several months.

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Join Us for NAFCU’s Member-Only Call.

Please join NAFCU’s CEO Dan Berger, Senior Vice President of Government Affairs and General Counsel Carrie Hunt, and other Senior Staff, on Wednesday, March 18, at 4:00 p.m. Eastern for our first legislative and regulatory briefing of 2015. We'll discuss what’s ahead in the credit union industry and provide an outlook for the economy and more.

Participation is free for all members, but you must register to attend. If you need assistance registering for the call, please contact NAFCU’s Member Service Center at 800-344-5580 or msc@nafcu.org.

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Happy Friday!

TGIF.  I thought I'd close out the week with a picture of my smiling twins!  They turned two-and-a-half this week.  Wow, how time flies!