NAFCU, CUNA and 28 other trade associations – including banking associations – sent a letter to federal legislators Monday urging them to support H.R. 3192, a measure that would hold lenders harmless for mistakes they make when attempting to comply in good faith with the CFPB's new real estate closing rule.
However, on Tuesday President Obama threatened to veto the legislation should it pass Congress.
"The CFPB has already clearly stated that initial examinations will evaluate good faith efforts by lenders. The Administration strongly opposes [the bill], as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the nation's financial stability," the White House said in a release.
The TILA-RESPA Integrated Disclosure rule took effect on Oct. 3, 2015.
The new measure would mandate a hold harmless agreement through Feb. 1, 2016. NAFCU reported that the House of Representatives scheduled a Wednesday vote on the bill.
"This legislation recognizes the unavoidable learning curve that accompanies the implementation of any new regulation," the letter read. "This learning curve may be particularly steep for TRID because these new forms and systems have yet to be used in an actual homebuyer transaction. A formal hold-harmless period will help ensure the real estate settlement and mortgage lending industries can adapt their business processes and continue to meet homebuyers' needs during the first few months following the October 3 implementation."
In addition to credit union trade associations, the American Bankers Association, the Independent Community Bankers of America and the Mortgage Bankers Association signed the letter.
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