QUESTION
Do we still have to use state law pre‐closing disclosures on or after
the August 1, 2015 TRID effective date?
ANSWER
TRID does not eliminate
or replace other state‐mandated disclosures. The new disclosure regime
only serves to replace
existing federal law requirements. The comments to
RESPA’s Regulation X specifically provide
that “[s]tate laws that give greater
protection to consumers are not inconsistent with and are not preempted
by RESPA or Regulation X.” [Regulation
X § 1024.5(c)(1)]
This provision is not changed
by TRID, so it remains in effect on or after August 1, 2015. Because
state law disclosures are generally deemed to provide
more protection for the borrower, TRID will not affect existing state‐mandated forms and procedures. For instance, states give
deference to TRID with respect to the intent to proceed requirement. However, a
state may provide greater protection to consumers with respect to other
regulatory requirements set forth in the CFPB’s TRID rule. States are currently
aligned with the CFPB regarding the intent to proceed mandate.
Thus, states
permit the exception allowing a creditor or other person to impose a bona fide and reasonable fee for
obtaining the consumer’s credit report, while also accepting the CFPB’s prohibition
under TRID that a creditor or other person may not impose a fee on a consumer
before the consumer has received the Loan Estimate and Indicated an intent to
proceed with the transaction. [Regulation X § 1024.7(a)(4) and (b)(4) and TILA
Regulation Z § 1026.19(a)(1)]
You should check your individual state laws and regulations to determine whether adjustments to state disclosures are planned
in conjunction with TRID implementation.
Brennan
Holland
Director/Legal
& Regulatory Compliance
Lenders Compliance Group
