On May 12, 2016, the Consumer Financial Protection Bureau (“CFPB”) published annotated model forms (“TILA Mapping Forms”) for the Loan Estimate and Closing Disclosure. The CFPB intends those annotations to indicate the statutory requirements in Chapter 2 of the Truth in Lending Act (“TILA”) on which it relied in implementing specific portions of those forms. Unfortunately, the Mapping Forms are subject to such extensive disclaimers that the CFPB might as well have issued them over Snapchat – this “guidance” could disappear at any time.
The TILA-RESPA Integrated Disclosure/Know Before You Owe Rule (“TRID”) implements portions of the Real Estate Settlement Procedures Act (“RESPA”), TILA, and the Dodd-Frank Act. Civil liability for violations of TRID is governed by the underlying statutes. To the extent the CFPB promulgated a particular TRID requirement solely under RESPA or the Dodd-Frank Act, a consumer generally would not have a private right of action for a violation of the requirement. However, a creditor – and in some circumstances, an assignee – is more likely to be subject to liability when a TRID violation involves a requirement the CFPB promulgated in whole or in part to implement Chapter 2 of TILA (also sometimes referred to as Part B of TILA).
The TRID Rule and its Commentary do not, however, address the extent to which a creditor or assignee may be held civilly liable for any particular TRID violation. In the rule’s preamble, the CFPB briefly mentions the statutory authority on which it relied in connection with each TRID requirement, but that preamble discussion is often ambiguous, difficult to parse, and occasionally even contradictory. The CFPB apparently published the TILA Mapping Forms yesterday in response to industry requests for clearer guidance. While the Mapping Forms are helpful, they do not resolve all of the complicated TRID liability issues that creditors and assignees continue to face. Perhaps most importantly, the Mapping Forms are subject to a general disclaimer that they do not represent the CFPB’s legal interpretation, guidance, or advice. They also do not purport to bind the agency or create any enforceable rights, benefits, or defenses that can be asserted by any party, in any manner. The CFPB declined to state what the Forms do represent, if anything.
Further, the Mapping Forms only indicate whether the CFPB relied on a statutory requirement in Chapter 2 of TILA when promulgating a given portion of the Loan Estimate or Closing Disclosure. The Forms do not provide any guidance with respect to TRID requirements outside the content of those disclosures, such as timing requirements or cure provisions. They also do not speak to whether a violation of any particular Chapter 2 requirement carries statutory damages, whether Loan Estimate errors are actionable, or the extent to which an assignee can be held liable for a violation because it is “apparent on the face of the disclosure statement.” CFPB Director Richard Cordray previously addressed these and other TRID liability issues in an informal letter to the Mortgage Bankers Association (the “MBA”), but the conclusions expressed in that letter are equally non-binding, and courts or other authorities may choose to give them no deference.
While the TILA Mapping Forms are a welcome addition to the growing body of informal guidance on the thorny issue of TRID liability, they are useful only so far as they are accurate and reliable. The accuracy of the annotations is open for analysis. However, as to their reliability, the CFPB’s explicit disclaimer and qualifier make them far from the authoritative roadmap the industry seeks (particularly after the informal Cordray MBA letter). Indeed, one wonders what is the point of the release? One also wonders what to hope for in connection with the CFPB’s planned rulemaking this summer! (Mayer Brown’s post regarding the upcoming rulemaking can be found here).