NATNews Blog > September 2015 > ​Cordray Pledges Hold Harmless Period

    ​Cordray Pledges Hold Harmless Period

    9/30/2015 9:11:52 AM
    During testimony before the House of Representatives Financial Services Committee on Sept. 29, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said government agencies do not intend to be “punitive” during the early days of the TILA/RESPA Integrated Disclosure rule implementation.
     
    “We have worked the other agencies, and this will be in writing by all of the agencies, that during the early period, we will be diagnostic and corrective, not punitive," Cordray said.  “We are not going to hammer people if they happen to get the forms wrong. We know there is no advantage to them in undermining consumers by changing the forms in some way. They are just trying to get it right so that it is how we are going to handle it. I have talked to the other agencies about it and they agree.”
     
    Cordray was being grilled by House Financial Services Committee Member Robert Hurt, the U.S. Representative for Virginia's 5th congressional district, about the financial impact of the rule on the consumer and the concern that smaller institutions had shared with him about the transition.
     
    “They were glad there was an announced effort to streamline the rules, but were also concerned about the end product and concerned about the process,” Hurt said, asking Cordray to speak to the issue of cost and the coming transition to the forms.
     
    Cordray said the CFPB had no choice about creating the new forms, as they were mandated by Congress, but said the agency did its “best to mitigate costs. “ He also noted the agency has worked extensively with the industry to help them comply by providing guidance. He also spoke to the issue of the long-term cost to consumers.
     
    “I am not convinced there will be a significant cost passed on to consumers,” he said.  “This is a change of forms. The concern is in the transition. It will be a better, cleaner process. Consumers will understand these forms better, that is what our testing has shown. The industry will benefit because consumers will be clearer and happier about what they are doing. Less angst around the closing, less surprises. I think it will be a better, but it is a matter of getting through it.”
     
    American Land Title Association President Diane Evans expressed appreciation for Cordray’s support of a hold-harmless period for companies making a good faith effort.
     
    “ALTA knows its members are ready for implementation of this regulation. However, we know from previous regulation implementations that there will be a learning curve and unforeseen issues once the new forms are used in real homebuyer transactions,” Evans said.