Citing COVID-19 disruptions, CFPB interpretive rule allows waiver of waiting periods under mortgage disclosure, rescission rules

Consumers impacted by the COVID-19 (coronavirus) pandemic can exercise their rights to modify or waive certain required waiting periods under the Truth in Lending Act/Real Estate Settlement Procedures Act (TILA-RESPA) integrated disclosure rule (also known as the “TRID” rule) and Regulation Z rescission rules, the Consumer Financial Protection Bureau (CFPB) said in issuing an interpretive rule Wednesday.

The bureau said the interpretive rule, which takes effect upon its publication in the Federal Register, provides that a consumer has a “bona fide personal financial emergency” that would permit them to utilize the TRID modification and waiver provisions if they determine their need to obtain funds due to the COVID-19 pandemic (1) necessitates consummating the credit transaction before the end of the TRID rule waiting periods or (2) must be met before the end of the Regulation Z rescission rules waiting period.

The bureau also concludes in the interpretive rule that the COVID-19 pandemic is a “changed circumstance” for purposes of certain TRID rule provisions, allowing creditors to use revised estimates reflecting changes in settlement charges for purposes of determining good faith, the rule summary states.

Additionally, the bureau issued a frequently asked questions (FAQ) document that addresses when, under the Equal Credit Opportunity Act (ECOA) valuations rule, creditors must provide appraisals or other written valuations to mortgage applicants in order to expedite access to credit for consumers affected by the COVID-19 pandemic.

The CFPB said it has received numerous questions and requests for clarification in recent weeks from “stakeholders,” including creditors, industry representatives, and state regulators, about the application of certain provisions in the TRID rule and Reg Z’s right of rescission rules in light of the pandemic. “This interpretive rule will help expedite consumers’ access to credit under the TRID Rule and Regulation Z Rescission Rules,” it said.

CFPB release: CFPB Paves Way for Consumers Facing Financial Emergencies to Obtain Access to Mortgage Credit More Quickly

Interpretive rule addressing the TRID rule, Regulation Z rescission rules issues

FAQ document addressing the ECOA Valuations Rule issues

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