The CFPB released TILA-RESPA Integrated Disclosure (TRID) Rule FAQs that clarify (1) when a creditor must provide a corrected Closing Disclosure three business days before consummation, and (2) that a safe harbor exists if a creditor uses a model form, even if that form does not reflect a TRID Rule change finalized in 2017.
First, the FAQs explain that if there is a change to the disclosed terms made under the TRID Rule after a creditor has provided the initial Closing Disclosure, the creditor must ensure that a consumer receives the corrected Closing Disclosure at least three business days before consummation of the transaction when: (1) the change results in the APR being inaccurate; (2) the loan product information required to be disclosed under the TRID Rule has become inaccurate; or (3) a prepayment penalty has been added to the loan. If the change is not one of these three types of changes, then it is sufficient for a consumer to receive the corrected Closing Disclosure at or before consummation. Additionally, the FAQs state that an overstated APR is accurate under Regulation Z if the difference between the disclosed APR and the actual APR for the loan falls within a Regulations Z applicable tolerance, and therefore, a creditor is not required to ensure the consumer receives the corrected Closing Disclosure at least three business days before consummation under these circumstances.
Second, the FAQs clarify that Section 109(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act did not change the timing for consummation if a creditor is required to provide a corrected Closing Disclosure under the TRID Rule.
Third, the use of an appropriate model form by a creditor is deemed to be in compliance with the disclosure requirements associated with the Loan Estimate and Closing Disclosure, as long as the creditor properly completes the form with accurate content. The creditor obtains a safe harbor even if the model form does not reflect changes to the TRID Rule regulatory text and commentary that were finalized in 2017.