May 12, 2016
Clients and Friends,
The CFPB announced in an email today that it has published on its website versions of the Loan Estimate (LE) and Closing Disclosure (CD) that are annotated with the sections of chapter 2 (Part B) of TILA that the CFPB says were “referenced in the Integrated Mortgage Disclosure final rule.” This is important information because, as you may already know, provisions of the rule that are implemented under authority in Part B of TILA will most likely be subject to civil liability under TILA section 130. In addition, the particular provisions of Part B that were relied on by the CFPB will determine whether statutory damages are available to plaintiffs.
Please note that the CFPB stated that these annotated forms contain the “citations…referenced in the preamble of the [final rule],” and the CFPB appears to have cited more than the statutory provisions that it expressly relied on in the preamble of the final rule. The CFPB appears to cite literally any statutory provision that was “referenced” in the preamble, which may indicate an intent to expand the statutory authority for the forms from what was relied on in the final rule, and to increase the potential liability under TRID.
For example, the annotated LE cites TILA section 128(b)(2)(C)(ii) for the Product disclosure under section 1026.37(a)(10), but the preamble for this provision only notes the existence of this statutory provision and does not include the provision in the statutory authority that was expressly relied on for the Product disclosure. This is also the case for the AIR Table under section 1026.37(j), for which the annotated LE cites TILA section 128(b)(2)(C)(ii), but the preamble only notes the existence of that provision and does not expressly rely on it as authority. In addition, significantly, page 2 of the annotated LE and CD both cite TILA section 128(a)(17) for the entirety of the Closing Cost Details.
For these reasons, these annotated disclosures will be important documents to review and understand to fully analyze the potential liability under TRID. For my clients, if I have already provided you with an analysis of the liability under TRID, please let me know if you would like to discuss updating it to reflect the CFPB’s annotated disclosures. For my other clients and friends, please let me know if you would like an analysis of the liability under TRID.
You can access the versions of the LE and CD at http://files.consumerfinance.gov/f/documents/201605_cfpb_loan-estimate-with-truth-in-lending-act-disclosure-citations.pdf and http://files.consumerfinance.gov/f/documents/201605_cfpb_closing-disclosure-with-truth-in-lending-act-disclosure-citations.pdf.
Please let me know if you have any questions.