CFPB Updates

CFPB restrained enforcement, Wells Fargo, and unlawful inducement

Dear Fund Member:

By now you have received a Fund Alert that the effective date of the new CFPB/TRID rules has been moved from August 1, 2015 to October 1, 2015. CFPB explained that this change was the result of 1) a "technical mistake" (which would have caused only a two week delay) and 2) CFPB’s determination that the additional time would better "accommodate the interests of [...] consumers and providers whose families will be busy with the transition to the new school year at that time."

Yes. This means that the new rules do not kick in until October 1, 2015. You will receive more information next week about how this change will flow through to the release of the DoubleTime® upgrade, education and training opportunities and related issues.

The industry is also all abuzz about a letter issued by CFPB Executive Director Richard Cordray on Wednesday, June 2. Director Cordray was responding to inquiries from many people in the industry and members of Congress about the need for a period of restrained enforcement of the new residential mortgage loan closing rules (TRID/IMD/CFPB rules) because of the complexity of the new rules and the unknowns of applying these complex rules to real-life situations. The letter did not exactly affirm a clear period of restrained enforcement. Director Cordray merely states that “their oversight of the implementation of the rule will be sensitive to the progress made by those entities that have squarely focused on making good faith efforts to come into compliance with the Rule on time.” Hmmmm... Bottom line: if you combine this message with the one issued yesterday on delayed implementation, it seems that NOW everyone needs to be ready to comply on October 1st and to fully engage with your lender partners in a joint good-faith effort to implement the new rules. If you want to read the full letter, it is posted on our Readiness page as a PDF.

Unlawful Inducement:

Florida Department of Financial Services (which regulates licensed agents) has issued a proposed rule setting forth a list of specific activities that will constitute an unlawful inducement of referral of title insurance business. The list is fairly long and deserves careful analysis. There was a workshop on June 8 in Tallahassee. I will provide follow up information when I have it because I will be asking for your input as to the application of this rule in the real world. I am all for prohibiting inappropriate behavior, but do not want the net to be spread so wide that it prevents normal promotional activity that does not cause any harm to the public. You can read the proposed rule from the Florida Department of Financial Services online.

Wells Fargo Settlement Agent message:

Wells Fargo issued an update to their procedures under the new CFPB rules. It is definitely worth reading. Here are a few things to note: Wells will begin communicating with you 10 days prior to closing to get closing costs for the CD; Wells’ position on borrowers wanting to sign early; validating your information on eLynx eCN service (which is what you use to get loan documents from Wells). The full memo is posted on our Readiness page as a PDF.

Please do not forget about our CFPB Hotline to help you with questions related to the new CFPB rule: cfpbfaq@thefund.com and 1-844-237-2327.

I hope you have found this information helpful. Thank you for your support of The Fund!

Best Regards,

Melissa Jay Murphy
Senior Vice President and
General Counsel