Credit unions are encouraged to advise mortgage borrowers with a need for immediate access to funds that they can forego waiting periods for some of the loans, due to the coronavirus crisis, the federal credit union regulator said Monday.
In a “regulatory alert” to federally insured credit unions, the National Credit Union Administration (NCUA) noted that in late April the Consumer Financial Protection Bureau (CFPB) issued an interpretative rule that consumers affected by the 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.
In its alert (20-RA-03), the NCUA said that the interpretive rule (which took effect May 4) “provides that the need to obtain funds and not delay closing for reasons related to the COVID-19 pandemic may be a ‘changed circumstance’ or ‘bona fide personal emergency’ which would permit borrowers to waive waiting periods under both rules, or permit a credit union to amend some TRID documents.”
NCUA Board Chairman Rodney Hood (who signed the alert) said that, although the rule does not require credit unions to inform borrowers of their ability to forego the waiting periods, “I encourage you to advise borrowers with a need for immediate access to funds of the right and manner to utilize these waiver provisions.”
He also noted that the interpretive rule provides that credit unions that make certain changes to disclosures for reasons related to the pandemic can still be considered to be acting in good faith under the TRID rule.