Dear Boards of Directors and Chief Executive Officers:
On May 4, 2020, the Consumer Financial Protection Bureau issued an interpretive rule (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) to clarify when consumers can elect to modify or waive certain required waiting periods for some mortgage loans due to the COVID-19 pandemic. The interpretive rule, effective immediately, specifically addresses waivers of required waiting periods under the TILA-RESPA Integrated Disclosure (TRID) rule and the Regulation Z right of rescission rule.1
The interpretive rule 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.
Under the TRID rule, credit unions generally must provide the Loan Estimate to consumers no later than seven business days before consummation. Members must receive the Closing Disclosure no later than three business days before consummation. Regulation Z provides consumers with a three business day period from consummation to rescind non-purchase credit transactions (such as refinances, second mortgages and HELOCs) secured by the member’s principal dwelling. Borrowers can waive the waiting periods when faced with a bona fide personal emergency for which they require funds immediately.
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. The interpretive rule also provides that credit unions who 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.
Credit unions can find more information about mortgage lending requirements on the NCUA’s Consumer Compliance Regulatory Resources page.
If you have questions about this information, please contact the NCUA’s Office of Consumer Financial Protection at 703.518.1140 or by email at ComplianceMail@ncua.gov. Credit unions can also contact their NCUA regional office or their state supervisory authority.
Rodney E. Hood
1 See the TRID resources page on the CFPB’s website for more information on the TRID rule, and 12 CFR 1026.15 (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) and 1026.23 (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) for right of rescission requirements.