[Federal Register Volume 84, Number 226 (Friday, November 22, 2019)]
[Proposed Rules]
[Pages 64436-64441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25260]


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 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 84, No. 226 / Friday, November 22, 2019 / 
Proposed Rules  

[[Page 64436]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Parts 1024 and 1026

[Docket No. CFPB-2019-0055]


Request for Information Regarding the Integrated Mortgage 
Disclosures Under the Real Estate Settlement Procedures Act (Regulation 
X) and the Truth In Lending Act (Regulation Z) Rule Assessment

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Assessment and request for public comment.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
conducting an assessment of the Integrated Mortgage Disclosures Under 
the Real Estate Settlement Procedures Act (Regulation X) and the Truth 
In Lending Act (Regulation Z) Rule and certain amendments in accordance 
with section 1022(d) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act). The Bureau is requesting public 
comment on its plans for assessing this rule as well as certain 
recommendations and information that may be useful in conducting the 
planned assessment.

DATES: Comments must be received on or before: January 21, 2020.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2019-
0055, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include Docket No. CFPB-
2019-0055 in the subject line of the email.
     Mail/Hand Delivery/Courier: Comment Intake--TRID 
Assessment, Consumer Financial Protection Bureau, 1700 G Street NW, 
Washington, DC 20552.
    Instructions: The Bureau encourages the early submission of 
comments. All submissions must include the document title and docket 
number. Because paper mail in the Washington, DC area and at the Bureau 
is subject to delay, commenters are encouraged to submit comments 
electronically. In general, all comments received will be posted 
without change to http://www.regulations.gov. In addition, comments 
will be available for public inspection and copying at 1700 G Street, 
NW, Washington, DC 20552, on official business days between the hours 
of 10 a.m. and 5 p.m. Eastern Time. You can make an appointment to 
inspect the documents by telephoning 202-435-9169.
    All submissions in response to this request for information, 
including attachments and other supporting materials, will become part 
of the public record and subject to public disclosure. Proprietary 
information or sensitive personal information, such as account numbers 
or Social Security numbers, or names of other individuals, should not 
be included. Submissions will not be edited to remove any identifying 
or contact information.

FOR FURTHER INFORMATION CONTACT: Dustin Beckett, Economist; Pedro De 
Oliveira, Senior Counsel; Alan Ellison, Small Business Program Manager; 
Division of Research, Markets, and Regulations at 202-435-7700. If you 
require this document in an alternative electronic format, please 
contact [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    Section 1022(d) of the Dodd-Frank Act requires the Bureau to 
conduct an assessment of each significant rule or order adopted by the 
Bureau under Federal consumer financial law. The Bureau must publish a 
report of the assessment not later than five years after the effective 
date of such rule or order. The assessment must address, among other 
relevant factors, the rule or order's effectiveness in meeting the 
purposes and objectives of title X of the Dodd-Frank Act and the 
specific goals stated by the Bureau. The assessment also must reflect 
available evidence and any data that the Bureau reasonably may collect. 
Before publishing a report of its assessment, the Bureau must invite 
public comment on recommendations for modifying, expanding, or 
eliminating the rule or order.\1\
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    \1\ 12 U.S.C. 5512(d).
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    In November 2013, the Bureau issued a final rule titled 
``Integrated Mortgage Disclosures under the Real Estate Settlement 
Procedures Act (Regulation X) and the Truth In Lending Act (Regulation 
Z)'' to implement sections 1098 and 1100A of the Dodd-Frank Act and, as 
amended, the rule took effect on October 3, 2015.\2\ This document 
refers to this rule as the ``2013 TILA-RESPA Final Rule.'' The Bureau 
amended the 2013 TILA-RESPA Final Rule on two occasions before its 
effective date.\3\ This document refers to the rule as amended when it 
took effect on October 3, 2015 as ``the TRID Rule'' or ``the Rule.'' As 
discussed below, the Bureau has determined that the TRID Rule is a 
significant rule and it will conduct an assessment of the Rule.
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    \2\ 78 FR 79730 (Dec. 31, 2013), 80 FR 43911 (July 24, 2015).
    \3\ See 80 FR 8767 (Feb. 19, 2015) (January 2015 Amendments); 80 
FR 43911 (July 24, 2015) (July 2015 Amendments).
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    The Bureau also amended the TRID Rule after the October 3, 2015 
effective date, in amendments issued in July 2017 and April 2018.\4\ 
While such amendments are not intended to be the subject of this 
assessment, the Bureau may consider certain of the amendments to the 
extent that doing so will facilitate a more meaningful assessment of 
the TRID Rule and data is available. Furthermore, the Bureau 
acknowledges that certain information, such as data focused on current 
mortgage practices, may reflect these 2017 and 2018 amendments and 
therefore it may be difficult to isolate the effects of the TRID Rule 
during this assessment. This assessment will treat and discuss the 
challenge of distinguishing between the effects of the TRID Rule and 
the effects of the 2017 and 2018 amendments to it as a factor that 
makes it difficult to evaluate the effectiveness of the TRID Rule. In 
this document, the Bureau is requesting public comment on the issues 
identified below as part of the planned assessment.
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    \4\ See 82 FR 37656 (Aug. 11, 2017) (July 2017 Amendments); 83 
FR 19159 (May 2, 2018) (April 2018 Amendments).
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Assessment Process

    Assessments pursuant to section 1022(d) of the Dodd-Frank Act are 
for informational purposes only and are not part of any formal or 
informal rulemaking proceedings under the Administrative Procedure Act. 
The

[[Page 64437]]

Bureau plans to consider relevant comments and other information 
received as it conducts the assessment and prepares an assessment 
report. The Bureau does not, however, expect that it will respond to 
each comment received pursuant to this document in the assessment 
report. Furthermore, the Bureau does not anticipate that the assessment 
report will include specific proposals by the Bureau to modify any 
rules, although the findings made in the assessment will help to inform 
the Bureau's general understanding of implementation costs and 
regulatory benefits for future rulemakings.\5\ Upon completion of the 
assessment, the Bureau anticipates that it will issue an assessment 
report not later than October 3, 2020.\6\
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    \5\ The Bureau announces its rulemaking plans in semiannual 
updates of its rulemaking agenda, which are posted as part of the 
Federal government's Unified Agenda of Regulatory and Deregulatory 
Actions. The current Unified Agenda can be found here: http://www.reginfo.gov/public/do/eAgendaMain.
    \6\ Section 1022(d)(2) of the Dodd-Frank Act requires the Bureau 
to publish a report of assessment of a significant rule or order not 
later than five years after the rule or order's effective date.
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The TILA-RESPA Integrated Disclosure Rule

    For more than 30 years, Federal law required creditors and 
settlement agents to provide two different sets of disclosure forms to 
consumers applying for and consummating consumer mortgage transactions. 
Two different Federal agencies, the Department of Housing and Urban 
Development and the Board of Governors of the Federal Reserve System, 
developed these disclosure forms separately, under two distinct Federal 
statutes: the Truth in Lending Act (TILA) and the Real Estate 
Settlement Procedures Act of 1974 (RESPA). In 2010, under the Dodd-
Frank Act sections 1032(f), 1098, and 1100A, Congress directed the 
Bureau to integrate TILA and RESPA mortgage loan disclosures.\7\ At the 
same time, Congress also enacted a number of other new provisions 
governing disclosures related to origination and servicing of consumer 
mortgages, including several new disclosure requirements added to TILA. 
Many of these requirements were implemented by the Bureau in the TRID 
Rule.\8\ The major provisions of the TRID Rule are summarized below.
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    \7\ Public Law 111-203, 124 Stat. 1376, 2007, 2103-04, 2107-09 
(2010).
    \8\ See 78 FR at 79750-53.
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A. Major Provisions of the TRID Rule

    The TRID Rule contains six major elements.
1. Integration of Certain Mortgage Disclosures
    The TRID Rule implemented the Dodd-Frank Act's directive to combine 
certain disclosures that consumers received under TILA and RESPA in 
connection with applying for and closing on a mortgage loan. 
Specifically, the TRID Rule's Loan Estimate form integrated RESPA's 
Good Faith Estimate (GFE) and TILA's initial disclosure, while the TRID 
Rule's Closing Disclosure form integrated RESPA's HUD-1 settlement 
statement and TILA's final disclosure.
2. Disclosure Redesign
    The TRID Rule not only combined previous TILA and RESPA disclosures 
but also required that all creditors use standardized forms (i.e., the 
Loan Estimate and the Closing Disclosure) for most transactions, so 
that consumers get information in the same way across multiple 
applications, including applications to different creditors or for 
different loan products, thereby making it easier for consumers to 
comparison shop.\9\ While Regulation X already required a standard form 
for RESPA disclosures,\10\ TILA section 105(b) explicitly provides that 
nothing in TILA may be construed to require a creditor to use any model 
form or clause prescribed by the Bureau under that section.\11\ Section 
1100A (5) of the Dodd-Frank Act amended TILA section 105(b) to require 
that the Bureau publish a single, integrated disclosure for mortgage 
loan transactions (including real estate settlement cost statements) 
which includes the disclosure requirements of TILA in conjunction with 
the disclosure requirements of RESPA that, taken together, may apply to 
a transaction that is subject to both or either provisions of law.\12\ 
Unlike prior TILA mortgage disclosure requirements, the TRID Rule 
generally does not permit creditors to make changes to the standardized 
forms.\13\ The redesigned and standardized disclosures display key loan 
features in a manner intended to enable consumers to locate the 
features quickly through headings and labels. Moreover, the TRID Rule 
requires that creditors use a standardized format for most consumer 
mortgage transactions, so that consumers are presented information in 
the same manner across multiple loan types and multiple creditors.\14\ 
The TRID Rule also requires consistent formatting in the Loan Estimate 
and Closing Disclosure forms, to facilitate consumer understanding to 
aid in consumers' ability to identify discrepancies or changes that 
occurred in loan terms or costs after a Loan Estimate is provided.\15\
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    \9\ 78 FR at 80079.
    \10\ 12 CFR 1024.8.
    \11\ 15 U.S.C. 1604(b).
    \12\ Id.
    \13\ 12 CFR 1026.37(o); 12 CFR 1026.38(t)(3).
    \14\ 78 FR at 80079.
    \15\ 78 FR at 80074.
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3. Disclosure Provision Responsibility
    The TRID Rule changed how certain required information was 
disclosed. For example, the TRID Rule changed who was responsible for 
disclosing title insurance premiums for federally related mortgage 
loans.\16\ Whereas TILA required the creditor to provide the Truth in 
Lending disclosures and RESPA required settlement agents to provide the 
final HUD-1 settlement statement, the TRID Rule reconciled these 
statutory differences by making the creditor, rather than the 
settlement agent, ultimately responsible for providing the integrated 
Closing Disclosure.\17\ While creditors were coordinating with 
settlement agents to provide existing TILA and RESPA disclosures before 
the TRID Rule, by reallocating legal responsibility to creditors to 
provide disclosures, the TRID Rule also reallocated to them some of the 
risks of liability for regulatory violations.
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    \16\ 78 FR at 79964. Previously, the simultaneous title 
insurance premiums would be disclosed in accordance with State law 
allocations. The TRID Rule mandated disclosure of the full cost of 
the creditor's title insurance policy when such insurance is 
required by the creditor and of the incremental cost of the optional 
owner's title insurance policy. The Bureau decided that benefit of 
clearly disclosing a required cost outweighed the benefit of 
disclosing the lender's and owner's nominal title insurance premiums 
since such a nominal disclosure may result in confusion about what 
the consumer would actually pay if the consumer did not obtain an 
owner's title insurance policy.
    \17\ 78 FR at 79731.
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4. Definition of an Application
    The TRID Rule revised the regulatory definition of a consumer 
mortgage loan ``application.'' \18\ Under the Rule, an ``application'' 
consists of six specific items: The consumer's name, income, social 
security number, property address, estimated property value, and the 
mortgage loan amount.\19\
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    \18\ 78 FR at 80083-84.
    \19\ 12 CFR 1026.2(a)(3)(ii).
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5. Timing Requirements
    The TRID Rule changed the timing of when consumers receive certain 
information. The TRID Rule requires that within three business days of 
receiving an application, as defined by

[[Page 64438]]

the Rule, a creditor must provide a Loan Estimate to a consumer.\20\ 
The Rule also integrated the timing requirements of the TILA final 
disclosure and RESPA HUD-1 by generally requiring that consumers 
receive Closing Disclosures no later than three business days before 
consummation.\21\
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    \20\ 12 CFR 1026.19(e)(1).
    \21\ 78 FR at 80086. TILA, as implemented by Regulation Z, 
generally provides that, if the early TILA disclosures contain an 
APR that becomes inaccurate, the creditor shall furnish corrected 
TILA disclosures so that they are received by the consumer not later 
than three business days before consummation. On the other hand, 
RESPA and Regulation X generally require that the RESPA settlement 
statement be provided to the borrower at or before settlement.
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    For applications submitted to a mortgage broker, prior to the TRID 
Rule, Regulation X had already permitted a mortgage broker on a 
creditor's behalf to provide a RESPA GFE not later than three business 
days after a mortgage broker received information from a consumer 
sufficient to complete an application. Regulation X also assigned 
creditors the responsibility for ascertaining whether mortgage brokers 
had provided GFEs to consumers.\22\ However, the TILA disclosure 
requirements under Regulation Z did not apply to mortgage brokers.\23\ 
The TRID Rule reconciled these differences by making creditors 
responsible for ensuring that mortgage brokers provide Loan Estimates 
to consumers within three business days of mortgage brokers receiving 
the six specific application items (i.e., the three-business-day period 
begins even if creditors have not yet received the six specific 
application items from mortgage brokers).
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    \22\ 78 FR at 79799-801.
    \23\ Id.
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    The three-business-day period may facilitate consumers identifying 
whether and how the terms of their loans or of their transactions may 
have changed from what creditors or mortgage brokers previously 
disclosed to them.\24\ To prevent closing delays, the TRID Rule allows 
creditors to update Closing Disclosures in certain circumstances 
without triggering an additional three-business-day waiting period.\25\
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    \24\ 78 FR at 80086.
    \25\ 12 CFR 1026.19(f)(2)(i); see also 78 FR at 80086. If, 
between the time the Closing Disclosure is first provided and 
consummation, the loan's APR becomes inaccurate (over and above the 
specified tolerance level), the loan product changes, or a 
prepayment penalty is added, a corrected Closing Disclosure must be 
issued with an additional three-business-day period to review the 
transaction. All other changes to the Closing Disclosure may be made 
without an additional three-business-day waiting period, but a 
corrected Closing Disclosure must be provided at or before 
consummation. See 12 CFR 1026.19(f)(2)(ii).
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6. Tolerance Rules
    The TRID Rule also tightened the tolerance rules that limit 
creditors and third party service providers charging consumers 
settlement costs that exceed the estimates that had been previously 
disclosed.\26\ Absent timely revised disclosures from the creditor 
based on certain valid justifications such as a borrower-requested 
change, the TRID Rule subjects a larger category of charges to a ``zero 
tolerance'' prohibition on cost increases than was the case under 
RESPA. Specifically, the TRID Rule expands that ``zero tolerance'' 
category to also include fees charged by affiliates of creditors and 
fees charged by service providers selected by the creditor and fees for 
services for which the Rule does not permit consumers to shop.\27\
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    \26\ 78 FR at 80084. The preexisting RESPA GFE tolerance rules 
generally place charges into three categories: The creditor's 
charges for its own services, which cannot exceed the creditor's 
estimates unless an exception applies (``zero tolerance''); charges 
for settlement services provided by third parties, which cannot 
exceed estimated amounts by more than ten percent unless an 
exception applies (``ten percent tolerance''); and other charges 
that are not subject to any limitation on increases (``no tolerance 
limit'').
    \27\ Id.
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B. Significant Rule Determination
    The Bureau has determined that the TRID Rule is a significant rule 
for purposes of Dodd-Frank Act section 1022(d).\28\ The Bureau made 
this determination based on a number of factors, including the 
following. First, the Bureau considered the TRID Rule's effect on the 
features of consumer financial products and services, that is, 
mortgages, and the scale of operation changes caused by the Rule. The 
major elements of the TRID Rule described in the preceding section have 
caused significant changes in business operations.
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    \28\ For more information on how the Bureau determines a rule's 
significance for purposes of section 1022(d) of the Dodd-Frank Act, 
see U.S. Gov't Accountability Office, Dodd-Frank Regulations: 
Consumer Financial Protection Bureau Needs a Systematic Process to 
Prioritize Consumer Risks, December 2018, https://www.gao.gov/assets/700/696200.pdf.
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    Second, while generally creditors were already responsible for the 
GFE, by reallocating responsibility for completing and providing 
settlement disclosures to the consumer, the TRID Rule reallocated from 
settlement agents to creditors some of the risks of liability for 
regulatory violations. Such legal risk in turn may increase the risk to 
creditors that those who purchase their loans in the secondary market 
will demand that creditors repurchase the loans if they were not 
originated in compliance with the TRID Rule. To avoid or mitigate this 
risk, creditors may have increased the resources they devote to quality 
control to eliminate or reduce such defects in the disclosures they 
provide to consumers during origination.
    Third, the TRID Rule may have also affected quality control 
operations because, as described above, the Rule requires that all 
creditors use standardized forms for most consumer transactions,\29\ 
which can alter the risk of formatting-related regulatory violations 
whether that is risk increasing due to the change from model forms 
under TILA to prescribed, standard forms consistent with RESPA, or risk 
decreasing associated with providing fewer number of forms per mortgage 
transaction under TRID. Moreover, quality control operations are 
affected because the TRID Rule subjects a larger category of charges to 
a ``zero tolerance'' prohibition on cost increases,\30\ and implemented 
several new disclosure requirements added to TILA by the Dodd-Frank 
Act, including some disclosures that, if creditors did not give 
accurate ones, can give consumers private rights of action against 
creditors.\31\
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    \29\ 78 FR at 79993-94.
    \30\ See supra note 23.
    \31\ See supra note 8.
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    Finally, the Bureau considered the costs of the TRID Rule. In the 
1022(b)(2) cost-benefit analysis that accompanied the 2013 TILA-RESPA 
Final Rule, the Bureau estimated that the major costs of the Rule would 
be one-time implementation costs, primarily labor costs, which 
creditors, settlement agents or third-party providers would incur to 
update systems and procedures to comply with the Rule. Specifically, 
the Bureau estimated that the Rule would impose one-time costs of 
approximately $1 billion on creditors and approximately $340 million on 
settlement agents. In its analysis, the Bureau amortized all costs over 
five years, using a simple straight-line amortization, resulting in an 
estimate of approximately $275 million per year of cost for each of the 
five years. The Bureau also stated that the ongoing costs of the Rule 
would be ``negligible'' relative to the baseline of existing regulatory 
requirements.\32\
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    \32\ 78 FR at 80076.
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    Taking these factors and others into consideration, the Bureau 
concluded that the TRID Rule is ``significant'' for purposes of section 
1022(d) of the Dodd-Frank Act. Section 1022(d) therefore requires the 
Bureau to conduct an assessment of the TRID Rule.

[[Page 64439]]

The Assessment Plan

    Pursuant to section 1022(d) of the Dodd Frank Act, this assessment 
must address, among other relevant factors, the Rule's effectiveness in 
meeting the purposes and objectives of title X of the Dodd-Frank Act 
and the specific goals of the TRID Rule as stated by the Bureau.
    Purposes and Objectives of Title X. Section 1021 of the Dodd-Frank 
Act states that the Bureau shall seek to implement and, where 
applicable, enforce Federal consumer financial law consistently for the 
purpose of ensuring that all consumers have access to markets for 
consumer financial products and services and that markets for consumer 
financial products and services are fair, transparent, and 
competitive.\33\ Section 1021 also sets forth the Bureau's objectives, 
which are to exercise its authorities under Federal consumer financial 
law for the purposes of ensuring that, with respect to consumer 
financial products and services:
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    \33\ 12 U.S.C. 5511(a)
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    (a) Consumers are provided with timely and understandable 
information to make responsible decisions about financial transactions;
    (b) Consumers are protected from unfair, deceptive, or abusive acts 
and practices and from discrimination;
    (c) Outdated, unnecessary, or unduly burdensome regulations are 
regularly identified and addressed in order to reduce unwarranted 
regulatory burdens;
    (d) Federal consumer financial law is enforced consistently, 
without regard to the status of a person as a depository institution, 
in order to promote fair competition; and
    (e) Markets for consumer financial products and services operate 
transparently and efficiently to facilitate access and innovation.\34\
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    \34\ 12 U.S.C. 5511(b)(1)-(5).
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    Specific goals of the TRID Rule. Sections 1098 and 1100A of the 
Dodd-Frank Act set forth two goals for the TRID Rule: ``to facilitate 
compliance with the disclosure requirements of [TILA and RESPA]'' and 
``to aid the borrower or lessee in understanding the transaction by 
utilizing readily understandable language to simplify the technical 
nature of the disclosures.'' \35\
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    \35\ 12 U.S.C. 2603(a), 15 U.S.C. 1604(b).
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    The Bureau stated a number of goals in the final TRID Rule, the 
preamble to the final TRID Rule, and in public statements surrounding 
the release of the Rule. Generally, these goals reflect the goals set 
forth in the Dodd-Frank Act. In promulgating the Rule, the Bureau 
sought to: Aid consumers in understanding their mortgage loan 
transactions, facilitate cost comparisons, and assist consumers in 
making decisions regarding their mortgage loans, including helping 
consumers decide whether they can afford a loan as offered.\36\
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    \36\ 78 FR at 79730.
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    By combining the TILA and RESPA disclosures, the TRID Rule also 
sought to identify and reconcile inconsistencies between TILA and RESPA 
requirements to reduce regulatory burdens.\37\
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    \37\ 78 FR at 79730.
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    Scope and approach. To assess the effectiveness of the TRID Rule in 
meeting these goals and the purposes and objectives of the Dodd-Frank 
Act, the Bureau's current assessment plan is informed by a cost-benefit 
perspective. While section 1022(d) of the Dodd-Frank Act does not 
expressly require cost-benefit analysis, the Bureau believes such a 
cost-benefit perspective could be helpful in conducting this 
assessment, as a consideration of benefits and costs will assist the 
Bureau in evaluating the effectiveness of the TRID Rule. In particular, 
such an approach to evaluating the TRID Rule is consistent with the 
fact that the Bureau issued the TRID Rule after conducting a benefit 
cost analysis under section 1022(b)(2) of the Dodd-Frank Act. Research 
questions under the Bureau's assessment plan seek to quantify the costs 
and benefits of the TRID Rule as implemented, to the extent that 
available data and resources allow, with a focus on the: (i) Effects on 
consumers; (ii) effects on firms, particularly creditors, settlement 
service providers (including title agents), mortgage brokers, 
consumers, and others; and (iii) effects on markets related to mortgage 
origination. The Bureau believes that studying this set of effects will 
provide the most useful information for stakeholders, including 
potential future policymakers.
    To the extent possible, the assessment will associate Rule 
requirements with observed outcomes of interest. In certain cases, data 
may be available that will allow the Bureau to identify effects caused 
by the Rule. However, more generally, the presence of multiple other 
factors that affect the mortgage market independently of the Rule may 
make it challenging to identify exact measures of the effects of the 
Rule. In general, any association between observed outcomes and 
requirements of the Rule, while informative as to the effectiveness of 
the Rule, does not necessarily prove the Rule caused that outcome. In 
conducting this assessment, the Bureau will consider existing mortgage 
data and data that the Bureau may reasonably collect, including third-
party sources (see more detail below regarding the Bureau's research 
activities, data sources, and comment requests).
    The Bureau has been conducting, and will continue to conduct, 
external outreach meetings with industry (including trade 
associations), other government agencies, and consumer groups 
(including housing counselors). The primary goal of this outreach is 
for the Bureau to become better informed of the potential effects of 
the Rule on various market segments.
    Other research activities in addition to those described in the 
remainder of this section may also be considered as appropriate, and 
the Bureau is interested in suggestions from stakeholders regarding 
additional research activities that the Bureau could conduct to better 
assess the Rule.
1. Assessing Consumer Effects
    The approach to examining the TRID Rule's effect on consumers is 
shaped by four broad research questions based on the aforementioned 
goals of the Rule, namely, how the TRID Rule affected consumers': (i) 
Understanding of their mortgage disclosures; (ii) mortgage and 
settlement service shopping behaviors; (iii) satisfaction with their 
mortgage disclosures, mortgage products, and settlement services; and 
(iv) ability to compare and choose among mortgages and settlement 
services. Internal Bureau data can provide insight on many of these 
research questions. The TRID disclosure testing, conducted during the 
process that resulted in the 2015 TRID Rule, can provide causal 
estimates of the effect of the new disclosures on consumer 
understanding and on consumers' ability to compare mortgage terms 
across different mortgage products. In addition, analysis of the 
National Survey of Mortgage Originations (NSMO) can provide 
correlational estimates of how much consumers' knowledge, shopping, and 
satisfaction changed after the Rule took effect.
2. Assessing Firm Effects
    The approach to assessing the TRID Rule's effect on firms is shaped 
by four broad research questions: (i) What were the TRID Rule's 
implementation costs to firms; (ii) what are the TRID Rule's ongoing 
costs and cost savings to firms; (iii) how did the TRID Rule affect 
creditor's ability to sell mortgages to others on the secondary market; 
and (iv) how did the TRID Rule affect the way

[[Page 64440]]

creditors disclose information to consumers? \38\
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    \38\ In assessing the effects of the Rule on firms, the Bureau 
will also strive to identify outdated, unnecessary, or unduly 
burdensome aspects of the TRID Rule. See 12 U.S.C. 5511(b)(3).
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    To address these questions, the Bureau envisions conducting 
structured interviews and surveys with industry participants as well as 
using relevant data the Bureau already possesses and third-party 
information that may be useful. Surveying and interviewing creditors 
and settlement agents will help the Bureau to assess firms' 
implementation costs, ongoing costs, and cost savings, and allow the 
assessment to assess how the accuracy and timing of disclosures changed 
as a result of the TRID Rule and where creditors faced particular 
difficulties, if any, with respect to disclosures creditors provided.
    The Bureau anticipates that interviewing creditors and quality 
control providers will provide insight on potential difficulties the 
TRID Rule may cause for creditors seeking to sell mortgage loans in the 
secondary market. In addition, the Bureau may use loan-level securities 
data from the Bloomberg Terminal and aggregate secondary market data 
from Inside Mortgage Finance (IMF) to assess the TRID Rule's effect on 
creditors selling loans on the secondary market.
    Additional data that would be informative to the Bureau in 
understanding the effects of the Rule on creditors providing 
disclosures to consumers include a consumer-level dataset. Such a 
dataset would be most informative if it covered a period before and 
after the effective date of the TRID Rule and if it included all or 
most TILA and RESPA related mortgage loan disclosures that creditors 
provided to consumers in the process of obtaining a mortgage loan. The 
ideal fields contained in this dataset would include the type of 
disclosure, the date it was disclosed, if the creditor re-disclosed 
forms, the reason for the creditor's re-disclosure, and fields for 
information contained on the forms (i.e., loan terms, loan structure, 
loan fees, closing costs, etc.). This dataset would help the Bureau 
understand how the Rule affected the information consumers received 
from creditors (e.g., have initial disclosures become more accurate? Or 
timelier?).
3. Assessing the Effects on Markets Related to Mortgage Origination
    Consumer demand and firm supply interact in markets. This 
interaction can be measured in transaction prices, transaction volume, 
and market structure, among other ways. The assessment's approach to 
market effects is thus reflected by three broad questions: (i) Did the 
TRID Rule affect the price of mortgages or the volume of mortgage 
originations in the aggregate or for particular market segments or 
mortgage product types (e.g., construction loans, subordinate liens, 
manufactured housing, etc.)?, (ii) did the TRID Rule affect entry, 
exit, or consolidation in any parts of the mortgage market?, and (iii) 
did the TRID Rule's specific provisions affect market structure by 
changing the relationship between various providers (e.g., creditors 
and settlement agents or creditors and their affiliates)?
    To assess market effects, the assessment will rely first on data 
the Bureau already possess, such as Home Mortgage Disclosure Act (HMDA) 
data and the National Mortgage Database (NMDB) and stress testing data 
from the Federal Reserve (Y-14 data). These datasets may be used to 
identify changes in overall loan volumes, mortgage prices, price 
dispersions, and the availability of mortgage products. In addition, 
the assessment will rely on the same survey and structured interviews 
with industry participants that would be used to consider costs on the 
firm side. The industry survey will allow the Bureau to assess specific 
areas of the market or mortgage product types (e.g., construction 
loans, subordinate liens, manufactured housing, etc.). Surveying 
creditors and settlement agents will allow us to assess changes in the 
relationship between creditors and settlement agents as a result of 
their changing roles under the TRID Rule. Surveying creditors will also 
allow the Bureau to assess changes in the relationships between 
creditors and other entities involved in mortgage transactions as a 
result of the TRID Rule's changed disclosure tolerances.
    Comments from the 2018 Call for Evidence. The Bureau is considering 
in its TRID Rule assessment plan the comments received in relation to 
the TRID Rule during the 2018 Call for Evidence Requests for 
Information (RFIs).\39\ The Bureau received approximately 63 comments 
related to the TRID Rule. Most TRID-related comments were submitted to 
the Adopted Regulations and New Rulemaking Authorities RFI and to the 
Inherited Regulations and Inherited Rulemaking Authorities RFI 
(Rulemaking RFIs).\40\ Trade associations, consumer advocacy groups, 
and others from industry provided comments relevant to the TRID Rule. 
The assessment plan and research questions reflect the information 
provided to the Bureau in response to the Calls for Evidence, to the 
extent the comments highlighted topics concerning the TRID Rule.
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    \39\ In January 2018, the Bureau commenced a ``Call for 
Evidence'' to ensure that the Bureau is fulfilling its proper and 
appropriate functions to best protect consumers. Over a number of 
weeks, the Bureau published in the Federal Register a series of 
Requests for Information (RFIs) seeking comment on enforcement, 
supervision, rulemaking, market monitoring, complaint handling, and 
education activities. These RFIs provided an opportunity for the 
public to submit feedback and suggest ways to improve outcomes for 
both consumers and covered entities. Altogether, over 88,000 
comments were received across 12 dockets.
    \40\ For comments on the Adopted Regulations and New Rulemaking 
Authorities Request for Information, see https://www.regulations.gov/docket?D=CFPB-2018-0011. For comments on the 
Bureau's Inherited Regulations and Inherited Rulemaking Authorities 
Request for Information, see https://www.regulations.gov/docket?D=CFPB-2018-0012.
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    Comments to the Rulemaking RFIs generally centered on topics and 
issues pertaining to TRID including curing violations, secondary market 
issues, applicability to specific products, disclosure redesign, legal 
liability, and title insurance. For example, with regard to secondary 
market issues, two trade groups expressed concerns that creditors will 
need to either retain in portfolio or sell on the ``scratch and dent'' 
secondary market at a steep discount loans containing TRID errors. 
Commenters indicated that this treatment of loans results in lack of 
liquidity or losses for the lender. Commenters also indicated that 
lenders can face higher risk of receiving buyback requests, which are 
demands from investors (most often GSEs) that lenders buy back the loan 
from the creditor due to documentation errors or other irregularities. 
As another example, a trade group commented that many creditors have 
been hesitant to offer more complex mortgage products, including, among 
others, construction loans, for fear of misinterpreting TRID 
requirements. Four commenters provided comments relating to the 
construction loan market specifically. Most of these commenters 
requested additional guidance or simpler disclosures for construction 
loans.
    In March of 2018, as part of the 2018 Call for Evidence series, the 
Bureau also issued the Bureau Guidance and Implementation Support 
Request for Information (Guidance RFI), a request for comment and 
information to assist the Bureau in assessing the overall effectiveness 
and accessibility of its guidance materials and activities (including 
implementation support) to

[[Page 64441]]

members of the general public and regulated entities.\41\ The comments 
the Bureau received in response to the Guidance RFI highlight the 
importance of guidance and compliance aids for regulatory 
implementation, specifically for implementing highly technical rules 
such as the TRID Rule.\42\ They also highlighted certain aspects of 
guidance that were not addressed or guidance styles that did not work 
well such as providing more guidance on what requirements of the TRID 
Rule apply to different segments of the market and providing specific 
examples to facilitate compliance. For assessment purposes of the TRID 
Rule, the Bureau is interested in learning more about any aspects of 
the Rule that were confusing or on which more guidance was needed, 
whether at the time the Rule took effect or afterwards, and the effects 
of this confusion or lack of guidance (including any unintended effects 
on market liquidity in any sectors of the housing finance system).
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    \41\ For the full electronic docket, see https://www.regulations.gov/docket?D=CFPB-2018-0013. The Bureau received 
approximately 49 comments on this RFI (42 that addressed the 
substance of the RFI). The Bureau received a number of comments 
related to guidance but for the purpose of the TRID assessment, only 
comments received related to TRID guidance are mentioned.
    \42\ The Bureau continues to update and improve its regulatory 
guidance and implementation aids. Several materials were, and will 
be, published after the implementation of the TRID Rule to provide 
more guidance and clarity, and the Bureau continues to work to 
identify and address additional guidance needs.
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Request for Comment

    The Bureau hereby invites members of the public to submit 
information and other comments relevant to the issues identified above 
and below, information relevant to enumerating costs and benefits of 
the TRID Rule to inform the assessment's cost-benefit perspective, and 
any other information relevant to assessing the effectiveness of the 
TRID Rule in meeting the purposes and objectives of title X of the 
Dodd-Frank Act (section 1021) and the specific goals of the Bureau. In 
particular, the Bureau invites the public, including consumers and 
their advocates, housing counselors, mortgage creditors, settlement 
agents, and other industry participant, industry analysts, and other 
interested persons to submit comments on any or all of the following:
    (1) Comments on the feasibility and effectiveness of the assessment 
plan, the objectives of the TRID Rule that the Bureau intends to use in 
the assessment, and the outcomes, metrics, baselines, and analytical 
methods for assessing the effectiveness of the Rule as described in 
part IV above;
    (2) Data and other factual information that the Bureau may find 
useful in executing its assessment plan and answering related research 
questions, particularly research questions that may be difficult to 
address with the data currently available to the Bureau, as described 
in part IV above;
    (3) Recommendations to improve the assessment plan, as well as 
data, other factual information, and sources of data that would be 
useful and available to the Bureau to execute any recommended 
improvements to the assessment plan;
    (4) Data and other factual information about the benefits and costs 
of the TRID Rule for consumers, creditors, or other stakeholders;
    (5) Data and other factual information about the effects of the 
Rule on transparency, efficiency, access, and innovation in the 
mortgage market;
    (6) Data and other factual information about the Rule's 
effectiveness in meeting the purposes and objectives of title X of the 
Dodd-Frank Act (section 1021), which are listed in part IV above;
    (7) Data and other factual information on the disclosure dataset 
specified in the Assessing Firm Effects section above under part IV;
    (8) Comments on any aspects of the TRID Rule that were or are 
confusing or on which more guidance was or is needed during 
implementation including whether the issues have been resolved or 
remain unresolved; and
    (9) Recommendations for modifying, expanding, or eliminating the 
TRID Rule.

    Dated: November 13, 2019.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2019-25260 Filed 11-21-19; 8:45 am]
 BILLING CODE 4810-AM-P