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66 opportunity to turn what could have been an embarrassing episode into some positive press for the agency. It issued a proposed rule on June 24, 2014 to delay the TRID rule's effective date until October 3, 2015 (but also sought comment on the August 15 date). Considering that the industry was already 19 months into the 20-month implementation period, in which project plans, staffing plans, technology planning, third party contracts, and importantly, staff vacations may have been planned for months to over a year, the delay had serious consequences for companies that had been diligently working towards August 1, 2015. Operational challenges from changing all of these timeframes at the last minute are tricky. is is especially true considering the final effective date is not known. e CFPB did not provide a date by which they expect to let industry know the final effective date. And because they issued a proposed rule to delay the effective date, the public was permitted to submit comments to the CFPB on the delay, which the CFPB has to review. Reviewing hundreds of comment letters takes time (is Author can speak from personal experience reviewing the almost 3,000 comment letters to the proposed TRID rule). Consequently, it may not be until mid-July that we know what the final effective date will be, which is only a month before the August 15 date on which the agency sought comment. It puts many companies that were aiming for August 1 in quite the TRID pickle. In its proposed rule, the CFPB stated that it decided to seek comment on a longer delay than August 15 because it was concerned that a mid-August effective date could pose operational challenges, and it learned of delays in software updates from technology vendors resulting in a limited amount of time for software testing. Also, in its initial June 17 announcement of the delay, Director Cordray expressed concerns about "consumers and providers whose families will be busy with the transition to the new school year at that time." But these are things the CFPB has been hearing about since TRID was issued. So, some are validly asking the question, "why now," especially with only 27 working days left before the effective date. Some say the CFPB did this on purpose to save face after mounting political pressure. After 19 months of stating that it would not delay TRID, and mounting pressure from the industry and Congress, the CFPB may have needed some cover for finally relenting. Others say it is an indication of the CFPB paying scant attention to TRID. e CFPB leadership has been noticeably less vocal about the TRID rule than its previous Title XIV rules, including the Servicing rule and Ability-to-Repay/ Qualified Mortgage rules. And the focus of an agency does come from the top down. After discovering its error, the agency may have been concerned about the potential for public criticism of its mistake, especially with its own tough treatment of compliance violations by the industry. By proposing to delay the TRID rule by two months, rather than the required two weeks, the agency was able to redirect public criticism of its own compliance violation to the drafting of comment letters supporting the CFPB's proposed delay. is appears to have happened, as the majority of the letters already submitted appear to be supportive of the delay. But whatever the reason for the administrative error or the delay, what does it mean for the industry? Importantly, the delay means the industry will have additional time to test its software. e TRID rule requires thousands of new data fields and calculations for the disclosures. And lenders need to make sure their loan origination software systems and document production software work seamlessly to properly complete the forms. Also, the TRID rule requires new integrations with the software of the title insurance industry, because the TRID rule assigns responsibility for the new Closing Disclosure, including its itemized list of settlement charges, to lenders. Unfortunately many third-party lender software vendors have only very recently released or not yet released fully functional software updates to their customers. And the software integrations, which are vitally important to the successful implementation of the TRID rule, cannot be fully tested until all of the lender software vendors release their software updates. e effective date delay will allow the industry additional time to test these software integrations. In addition, the effective date delay allows industry to obtain additional guidance form the CFPB. Many questions remain about the application of the TRID rule to the infinitely variable sets of facts that come up in individual real estate and credit transactions. Also, important questions about how the TRID rule affects the mortgage servicing industry have yet to be asked or answered. For example, does the new definition of "application" under the TRID rule include consumers' loss mitigation applications under the CFPB's Servicing Rule? e new TRID definition only includes six items, the name, income, social security number, the property address, estimate of the value of the property, and the mortgage loan amount sought. Arguably if a servicer obtains this information in a loss mitigation application, the need to provide the integrated disclosures could be triggered. In addition, the datasets for loans originated under the TRID rule may be different from those under the current rule, which servicers may need to take into account. How does this proposed TRID delay affect the implementation of future CFPB rules? It definitely opens the door to the possibility of effective date delays. For example, the CFPB's forthcoming Home Mortgage Disclosure Act (HMDA) rulemaking is heavily dependent on technology. Considering that the CFPB proposed to delay the effective date of the TRID rule because of its learning of software delays, the CFPB could delay whatever effective date it finalizes for the HMDA rule in the event of software delays. is also could apply to other implementations that are software dependent, including the CFPB's proposed changes to the periodic statement requirements. e industry may want to focus on flexible project plans for the CFPB's future rulemakings that provide breathing room for effective date delays, and the CFPB's administrative errors. "By proposing to delay the TRID rule by two months, rather than the required two weeks, the agency was able to redirect public criticism of its own compliance violation to the drafting of comment letters supporting the CFPB's proposed delay."

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