2013 Integrated Mortgage Disclosures Rule Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) and Amendments; Delay of Effective Date, 43911-43921 [2015-18239]

Agencies

• BUREAU OF CONSUMER FINANCIAL PROTECTION

[Federal Register Volume 80, Number 142 (Friday, July 24, 2015)]
[Rules and Regulations]
[Pages 43911-43921]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18239]



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Federal Register / Vol. 80, No. 142 / Friday, July 24, 2015 / Rules 
and Regulations

[[Page 43911]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Parts 1024 and 1026

[Docket No. CFPB-2015-0029]
RIN 3170-AA48


2013 Integrated Mortgage Disclosures Rule Under the Real Estate 
Settlement Procedures Act (Regulation X) and the Truth in Lending Act 
(Regulation Z) and Amendments; Delay of Effective Date

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official interpretations; delay of effective date.

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SUMMARY: The Consumer Financial Protection Bureau is delaying until 
October 3, 2015, the effective date of the TILA-RESPA Final Rule and 
the related TILA-RESPA Amendments. In light of certain procedural 
requirements under the Congressional Review Act (CRA), the TILA-RESPA 
Final Rule and the TILA-RESPA Amendments cannot take effect on August 
1, 2015, as originally provided by those rules. To comply with the CRA 
and to help ensure the smooth implementation of the TILA-RESPA Final 
Rule, the Bureau is extending the effective date of both the TILA-RESPA 
Final Rule and the TILA-RESPA Amendments beyond the additional minimum 
period required by the CRA to October 3, 2015, as proposed. The Bureau 
is also making certain technical amendments to the Official 
Interpretations of Regulation Z to reflect the new effective date and 
technical corrections to two provisions of Regulation Z adopted by the 
TILA-RESPA Final Rule.

DATES: The amendments in this final rule are effective on October 3, 
2015. Effective July 24, 2015, this final rule delays the effective 
date from August 1, 2015, until October 3, 2015, for the final rules 
amending 12 CFR parts 1024 and 1026 published December 31, 2013, at 78 
FR 79730, and February 19, 2015, at 80 FR 8767; and for amendatory 
instruction 5 amending Supplement I to 12 CFR part 1026, appearing on 
page 65325 in the Federal Register on November 3, 2014.

FOR FURTHER INFORMATION CONTACT: Pedro De Oliveira, David Friend, or 
Joel Singerman, Counsels; or Laura Johnson or Amanda Quester, Senior 
Counsels, Office of Regulations, Consumer Financial Protection Bureau, 
1700 G Street NW., Washington, DC 20552, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Summary of the Final Rule

    In November 2013, pursuant to sections 1098 and 1100A of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act),\1\ the Consumer Financial Protection Bureau (Bureau or CFPB) 
issued the Integrated Mortgage Disclosures Under the Real Estate 
Settlement Procedures Act (Regulation X) and the Truth in Lending Act 
(Regulation Z) (TILA-RESPA Final Rule), combining certain disclosures 
that consumers receive in connection with applying for and closing on a 
mortgage loan.\2\ On January 20, 2015, the Bureau issued the Amendments 
to the 2013 Integrated Mortgage Disclosures Rule Under the Real Estate 
Settlement Procedures Act (Regulation X) and the Truth in Lending Act 
(Regulation Z) and the 2013 Loan Originator Rule Under the Truth in 
Lending Act (Regulation Z) (TILA-RESPA Amendments or Amendments).\3\ As 
published in the Federal Register, the TILA-RESPA Final Rule and the 
TILA-RESPA Amendments (together, the TILA-RESPA Final Rule and 
Amendments) are effective on August 1, 2015. Because of an 
administrative error on the Bureau's part in complying with the 
Congressional Review Act (CRA) with respect to the TILA-RESPA Final 
Rule, the TILA-RESPA Final Rule and Amendments cannot take effect 
until, at the earliest, August 15, 2015 (CRA Effective Date).
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    \1\ Public Law 111-203, 124 Stat. 1376, 2007, 2103-04, 2107-09 
(2010).
    \2\ 78 FR 79730 (Dec. 31, 2013). The TILA-RESPA Final Rule 
finalized a proposal the Bureau had issued on July 9, 2012, 77 FR 
51116 (Aug. 23, 2012) (2012 TILA-RESPA Proposal).
    \3\ 80 FR 8767 (Feb. 19, 2015). The TILA-RESPA Amendments 
finalized a proposal the Bureau had issued on October 10, 2014, 79 
FR 64336 (Oct. 29, 2014).
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    On June 24, 2015, the Bureau issued a proposed rule to delay the 
effective date of the TILA-RESPA Final Rule and Amendments to October 
3, 2015 (Proposed Rule). The Proposed Rule also included certain 
technical amendments to the Official Interpretations to Regulation Z to 
reflect the proposed new effective date.\4\
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    \4\ For purposes of this final rule, these technical amendments 
include a change to amendatory instruction 5, appearing at 79 FR 
65325 (Nov. 3, 2014), which will change the effective date of 
comment 43(e)(3)(iv)-2. The Amendments to the 2013 Mortgage Rules 
Under the Truth in Lending Act (Regulation Z) revised that comment 
to coordinate the points and fees cure with the tolerance cure 
available under the TILA-RESPA Final Rule. The Bureau proposed to 
change amendatory instruction 5 to conform with the new effective 
date for the TILA-RESPA Final Rule and Amendments and is finalizing 
that proposal in this final rule.
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    The Bureau is now issuing this final rule to delay the effective 
date of the TILA-RESPA Final Rule and Amendments to October 3, 2015, 
and to finalize the related technical amendments in the Proposed Rule. 
As discussed in more detail in parts VI and VII below, this final rule 
also makes certain technical corrections to the TILA-RESPA Final Rule. 
Specifically, the Bureau is: (1) Amending Sec.  1026.38(i)(8)(ii) and 
(iii)(A) to include, in the amount disclosed as ``Final'' for 
Adjustments and Other Credits, the amount disclosed under Sec.  
1026.38(j)(1)(iii) for certain personal property sales, thus conforming 
the calculation of Adjustments and Other Credits on the Closing 
Disclosure and Loan Estimate; and (2) amending Sec.  1026.38(j)(1)(iv) 
to include, in the amount disclosed as Closing Costs Paid at Closing, 
lender credits disclosed under Sec.  1026.38(h)(3), thus conforming the 
disclosure of the borrower's cash to close in the Calculating Cash to 
Close and the Summaries of Transactions tables on the Closing 
Disclosure. These technical corrections are in line with existing 
industry expectations and informal Bureau guidance.

II. Background

A. The TILA-RESPA Integrated Disclosures Rulemaking

    Dodd-Frank Act sections 1032(f), 1098, and 1100A mandated that the 
Bureau establish a single disclosure scheme for use by lenders and 
creditors

[[Page 43912]]

in complying with the disclosure requirements of both the Real Estate 
Settlement Procedures Act (RESPA) and the Truth in Lending Act 
(TILA).\5\ Section 1098(2) of the Dodd-Frank Act amended RESPA section 
4(a) to require that the Bureau publish a single, integrated disclosure 
for mortgage loan transactions, including ``the disclosure requirements 
of this section and section 5, in conjunction with the disclosure 
requirements of [TILA].'' \6\ Similarly, section 1100A(5) of the Dodd-
Frank Act amended TILA section 105(b) to require that the Bureau 
publish a single, integrated disclosure for mortgage loan transactions, 
including ``the disclosure requirements of this title in conjunction 
with the disclosure requirements of [RESPA].'' \7\ The Bureau issued 
proposed integrated disclosure forms and rules for public comment on 
July 9, 2012, and issued the TILA-RESPA Final Rule on November 20, 
2013.\8\
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    \5\ 12 U.S.C. 5532(f), 2603; 15 U.S.C. 1604(b).
    \6\ 12 U.S.C. 2603(a).
    \7\ 15 U.S.C. 1604(b). The amendments to RESPA and TILA 
mandating a single, integrated disclosure are among numerous 
conforming amendments to existing Federal laws found in subtitle H 
of the Consumer Financial Protection Act of 2010 (the Consumer 
Financial Protection Act of 2010 is title X of the Dodd-Frank Act). 
Subtitle C of the Consumer Financial Protection Act, ``Specific 
Bureau Authorities,'' codified at 12 U.S.C. chapter 53, subchapter 
V, part C, contains a similar provision. Specifically, section 
1032(f) of the Dodd-Frank Act provides that, by July 21, 2012, the 
Bureau ``shall propose for public comment rules and model 
disclosures that combine the disclosures required under [TILA] and 
sections 4 and 5 of [RESPA] into a single, integrated disclosure for 
mortgage loan transactions covered by those laws.'' 12 U.S.C. 
5532(f). The Bureau issued the 2012 TILA-RESPA Proposal pursuant to 
that mandate and the parallel mandates established by the conforming 
amendments to RESPA and TILA, discussed above.
    \8\ 77 FR 51116 (Aug. 23, 2012) (2012 TILA-RESPA Proposal); 78 
FR 79730 (Dec. 31, 2013) (TILA-RESPA Final Rule); see also CFPB, 
CFPB Proposes ``Know Before You Owe'' Mortgage Forms (July 9, 2012), 
https://www.consumerfinance.gov/pressreleases/consumer-financial-protection-bureau-proposes-know-before-you-owe-mortgage-forms/; Know 
Before You Owe: Introducing Our Proposed Mortgage Disclosure Forms, 
CFPB Blog (July 9, 2012), https://www.consumerfinance.gov/blog/know-before-you-owe-introducing-our-proposed-mortgage-disclosure-forms/.
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    Upon issuing the TILA-RESPA Final Rule, the Bureau initiated 
extensive efforts to support industry implementation.\9\ Information 
regarding the Bureau's TILA-RESPA implementation initiative and 
available resources can be found on the Bureau's regulatory 
implementation Web site at www.consumerfinance.gov/regulatory-implementation/tila-respa.
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    \9\ These ongoing efforts include: (1) The publication of a 
small entity compliance guide and a guide to forms to help industry 
understand the new rules, including updates to the guides, as 
needed; (2) the publication of a readiness guide for institutions to 
evaluate their readiness and facilitate compliance with the new 
rules; (3) the publication of a disclosure timeline that illustrates 
the process and timing requirements of the new disclosure rules; (4) 
an ongoing series of webinars to address common interpretive 
questions, including an index of questions answered during those 
webinars; (5) roundtable meetings with industry, including 
creditors, settlement service providers, and technology vendors, to 
discuss and support their implementation efforts; (6) participation 
in dozens of conferences and forums; and (7) close collaboration 
with State and Federal regulators on implementation of the TILA-
RESPA Final Rule and Amendments, including coordination on 
consistent examination procedures. There were over 30,000 downloads 
of the Bureau's small entity compliance guide and other regulatory 
implementation support materials during June 2015 alone. 
Additionally, the Bureau has provided extensive informal guidance to 
support implementation of the TILA-RESPA Final Rule and Amendments.
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B. Proposed Effective Date

    As adopted, the TILA-RESPA Final Rule and Amendments are effective 
on August 1, 2015. Section 801 of the CRA precludes a rule from taking 
effect until the Federal agency promulgating the rule submits a rule 
report, including a copy of the rule, to each House of Congress and to 
the Comptroller General of the Government Accountability Office 
(GAO).\10\ The TILA-RESPA Final Rule is a major rule under the CRA. 
Major rules, as defined under the CRA, have several additional 
procedural requirements, including that they cannot take effect until 
60 days after (1) publication in the Federal Register or (2) receipt by 
Congress, whichever is later.\11\ Although the TILA-RESPA Final Rule 
was published in the Federal Register on December 31, 2013, and 
received widespread public and Congressional attention, the Bureau 
discovered on June 16, 2015, that it inadvertently had not submitted 
the rule report to Congress. Later that day, the Bureau submitted the 
report to both Houses of Congress and the GAO. Under the CRA, the TILA-
RESPA Final Rule cannot take effect until, at the earliest, August 15, 
2015, two weeks after the originally scheduled effective date. The 
TILA-RESPA Amendments cannot take effect before the TILA-RESPA Final 
Rule, as they amend the TILA-RESPA Final Rule.
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    \10\ 5 U.S.C. 801(a)(1)(A).
    \11\ 5 U.S.C. 801(a)(3), 804(2).
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    Given that the TILA-RESPA Final Rule would not take effect until 
the CRA Effective Date, the Bureau proposed a brief additional delay to 
October 3, 2015. In doing so, the Bureau discussed whether this 
additional delay could potentially benefit both consumers and industry 
more than having the new rules take effect on the CRA Effective Date. 
The Bureau recognized that adjusting operational systems from a target 
readiness date of August 1 to a target readiness date of August 15 
would likely pose implementation challenges for many organizations. The 
Bureau also recognized that a mid-month effective date could create 
additional challenges. Moreover, the Bureau noted that delays in the 
delivery of system updates had left some creditors with limited time to 
fully test all of their systems and system components to ensure that 
each system works with the others in an effective manner. These delays 
pose risks to smooth implementation of the TILA-RESPA Final Rule when 
combined with the challenges for institutions of adjusting operational 
systems to a new effective date.
    The Bureau also explained in the Proposed Rule that a Saturday 
effective date could allow for smoother implementation by affording 
industry time over a weekend to launch new systems configurations and 
to test systems. The Bureau noted that a Saturday launch would be 
consistent with existing industry plans tied to the original Saturday 
August 1 effective date. The Bureau explained its concern that a longer 
delay in implementation would impose unnecessary costs both on 
consumers and on those segments of industry that have worked diligently 
for a timely implementation. A longer delay would also be inconsistent 
with the Bureau's goal of implementing the new disclosures on the 
earliest practically feasible date to support consumer understanding of 
mortgage loan transactions.

III. Summary of the Rulemaking Process

    On June 24, 2015, the Bureau issued the Proposed Rule with a 
request for public comment. The Proposed Rule was published in the 
Federal Register on June 26, 2015.\12\
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    \12\ 80 FR 36727 (June 26, 2015).
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    The Bureau solicited comment on all aspects of the Proposed Rule. 
In particular, the Bureau asked commenters to provide specific detail 
and any available data regarding current and planned practices, as well 
as relevant knowledge and specific facts about any benefits, costs, or 
other impacts on both industry and consumers of the Proposed Rule. The 
Bureau solicited comment regarding the proposed extension of the 
effective date to October 3, 2015, as well as alternative dates for 
extension, including the prospect of allowing the new rules to take 
effect on the CRA Effective Date.
    The comment period closed on July 7, 2015. In response to the 
Proposed Rule, the Bureau received more than 1,300

[[Page 43913]]

comments from industry trade associations, creditors, technology 
vendors, and other industry representatives, as well as consumer 
advocacy groups and others. In adopting this final rule, the Bureau has 
considered and discussed relevant comments in parts V and VI below. 
Many of the comments urged the Bureau to take actions beyond the scope 
of the Proposed Rule.

IV. Legal Authority

    The Bureau is issuing this final rule pursuant to its authority 
under TILA, RESPA, and the Dodd-Frank Act. Specifically, the Bureau is 
exercising its rulemaking authority pursuant to TILA section 105(a), 
RESPA section 19(a), and Dodd-Frank Act section 1022(b)(1) to delay the 
effective date of the TILA-RESPA Final Rule and Amendments, including 
related technical amendments in the Proposed Rule.
    The legal authority for the TILA-RESPA Final Rule and the TILA-
RESPA Amendments is described in detail in the Legal Authority parts of 
the TILA-RESPA Final Rule and the TILA-RESPA Amendments, 
respectively.\13\ As amended by the Dodd-Frank Act, TILA section 105(a) 
directs the Bureau to prescribe regulations to carry out the purposes 
of TILA and provides that such regulations may contain additional 
requirements, classifications, differentiations, or other provisions, 
and may provide for such adjustments and exceptions for all or any 
class of transactions, that the Bureau judges are necessary or proper 
to effectuate the purposes of TILA, to prevent circumvention or evasion 
thereof, or to facilitate compliance therewith.\14\ Section 19(a) of 
RESPA authorizes the Bureau to prescribe such rules and regulations and 
to make such interpretations and grant such reasonable exemptions for 
classes of transactions as may be necessary to achieve the purposes of 
RESPA.\15\ Additionally, under Dodd-Frank Act section 1022(b)(1), the 
Bureau has general authority to prescribe rules ``as may be necessary 
or appropriate to enable the Bureau to administer and carry out the 
purposes and objectives of the Federal consumer financial laws, and to 
prevent evasions thereof.'' \16\ TILA and RESPA are Federal consumer 
financial laws.\17\ Accordingly, in issuing this final rule, the Bureau 
is exercising its authority under Dodd-Frank Act section 1022(b)(1) to 
prescribe rules under TILA, RESPA, and title X of the Dodd-Frank Act 
that carry out the purposes and objectives and prevent evasion of those 
laws. The Bureau believes that delaying the effective date to October 
3, 2015, will facilitate compliance with--and help ensure the smooth 
implementation of--the TILA-RESPA Final Rule and Amendments. Section 
1022(b)(2) of the Dodd-Frank Act prescribes certain standards for 
rulemaking that the Bureau must follow in exercising its authority 
under section 1022(b)(1).\18\
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    \13\ 78 FR 79730, 79753-56 (Dec. 31, 2013); 80 FR 8767, 8768-70 
(Feb. 19, 2015).
    \14\ 15 U.S.C. 1604(a).
    \15\ 12 U.S.C. 2617(a).
    \16\ 12 U.S.C. 5512(b)(1).
    \17\ 12 U.S.C. 5481(12), (14).
    \18\ 12 U.S.C. 5512(b)(2).
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    The Bureau is also making technical corrections to Sec.  
1026.38(i)(8)(ii) and (iii)(A) and Sec.  1026.38(j)(1)(iv), relying on 
the same authority used to implement Sec.  1026.38(i) and (j) in the 
TILA-RESPA Final Rule: TILA section 105(a); RESPA section 19(a); and 
Dodd-Frank Act sections 1032(a) and 1405(b).\19\
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    \19\ See 78 FR 79730, 80016, 80020 (Dec. 31, 2013). Sections 
1032(a) and 1405(b) of the Dodd-Frank Act are codified, 
respectively, at 15 U.S.C. 5532 and 15 U.S.C. 1601 note.
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V. Effective Date

    In the Proposed Rule, the Bureau requested comment specifically 
regarding the proposed extension of the effective date to October 3, 
2015, as well as alternative dates for extension, including allowing 
the new rules to take effect on the CRA Effective Date.

A. Comments Received

Extending the Effective Date Beyond the CRA Effective Date
    The vast majority of commenters who opined on the effective date--
including banks, credit unions, mortgage companies, industry service 
providers, trade associations, and individual commenters--supported 
extending the effective date beyond the CRA Effective Date. Consumer 
advocacy groups did not oppose the extension beyond the CRA Effective 
Date. Many commenters supported the proposed October 3, 2015, effective 
date without requesting any additional delay in the effective date. 
Other commenters recommended extending the effective date to various 
other dates, including September 3, 2015; November 1, 2015; December 
31, 2015; January 1, 2016; January 2, 2016; January 4, 2016; January 
14, 2016; or February 1, 2016.
    However, some commenters expressed concern about any delay of the 
effective date. For example, a few industry commenters suggested that 
their institutions or creditors more generally would be prepared for an 
August 1 effective date and that they consequently would not need or 
want any further delays. Several commenters were concerned about costs 
associated with any delay, including costs related to staffing, 
communications, scheduling, programming, and training, but they did not 
provide sufficient information about those costs from which to develop 
a reliable estimate of the costs on industry.
    Several commenters opposed any further delay beyond an early 
October effective date. For example, consumer advocacy groups urged 
that the effective date should not be delayed any further, in order to 
maximize the benefits of the new disclosures. Consumer advocacy groups 
commented that the new integrated disclosures will improve the format, 
content, and timing of information provided to many consumers in 
connection with the biggest purchase of their lives. Several industry 
commenters, including various trade associations, a technology vendor, 
and two banks, stated that adjusting operational systems from an 
effective date of August 1, 2015, to a later date poses extensive 
implementation challenges. As a result, industry has begun the process 
of making operational systems adjustments, even before finalization of 
the Proposed Rule, based on the proposed October 3, 2015, effective 
date.
    Support for extending the effective date was most often justified 
by commenters on the basis that industry needs more time to prepare. In 
particular, many commenters from industry, both individuals and 
institutions, cited delays in updating software and systems that 
industry relies on for compliance and also cited related delays in 
testing and training on such systems. Several industry commenters noted 
that extending the effective date would provide more time for creditors 
and service providers to clarify their understanding of the rule's 
extensive provisions, including through additional guidance issued by 
the Bureau. Some commenters, including trade organizations and a 
technology vendor, supported extending the effective date because 
implementation of the TILA-RESPA Final Rule and Amendments has been 
occurring while industry is implementing or adjusting to various other 
legal and regulatory changes, and at least one commenter noted that 
their resources are stretched thin as a result. Some industry 
commenters expressed the opinion that a delay in implementation would 
benefit consumers because industry would be better prepared to 
implement

[[Page 43914]]

the TILA-RESPA Final Rule and Amendments with more time.
    Industry commenters who sought a further delay in the effective 
date beyond October 3, 2015, generally relied on the same arguments 
raised by other commenters for any extension of the effective date. 
Among commenters who requested an additional delay in the effective 
date beyond October 3, 2015, the most common alternative date fell 
sometime near the beginning of 2016 (e.g., January 1, 2016; January 2, 
2016; or January 4, 2016). Industry commenters argued that they expect 
mortgage origination activity to slow during the end of the calendar 
year and the beginning of the new year, based on historical patterns, 
and a delay until early 2016 would thus permit a smoother transition. 
Some commenters, including a community bank and a credit union, 
requested a February 1, 2016, effective date instead of a date in 
January because implementation could be difficult around the end-of-
the-year holidays.
Specific Day of the Week or Time During the Month for the Effective 
Date
    Some industry commenters, including a national trade association, 
specifically supported a Saturday effective date (for example, October 
3, 2015) because it would allow companies to migrate their systems over 
a weekend. At least one commenter, a state trade association, supported 
a Friday effective date for similar reasons. Other commenters favored 
different days of the week for the effective date, such as a Monday or 
Thursday. For example, a credit union commenter favored a Thursday 
effective date because the TILA-RESPA Final Rule allows a three-
business-day window for delivering or placing the Loan Estimate in the 
mail, and thus a Thursday effective date would provide additional time 
to work through potential systems issues before the start of the 
following workweek. A credit union association commenter stated that a 
weekend effective date would require additional staff overtime costs 
and would therefore be undesirable.
    Several commenters, including a credit union and an individual 
commenter, stated that an effective date on the first day of the month 
would simplify implementation. However, a bank commenter stated that 
there would be additional staff challenges if the effective date is 
within the first few days after the end of a quarterly reporting 
period.
Technical Comments on the Effective Date
    The Bureau also received a number of technical comments about the 
effective date. One commenter suggested that the Bureau should amend an 
additional amendatory instruction, as discussed further below. Some 
commenters, including consumer advocacy groups, requested clarification 
as to whether all or only parts of the TILA-RESPA Final Rule and 
Amendments will have a new effective date. Additionally, other 
commenters requested clarification that the proposal for the final rule 
to take effect immediately upon publication referred to the delay of 
the effective date, not to the TILA-RESPA Final Rule and Amendments.
Other Comments
    The Bureau also received a number of comments that did not relate 
directly to the date when the TILA-RESPA Final Rule should become 
effective. Many banks, credit unions, mortgage companies, industry 
service providers, trade associations, and individual commenters from 
industry--including many who did not request an additional delay in the 
effective date beyond October 3, 2015--requested a safe harbor period, 
hold-harmless period, or other formal grace period after the effective 
date to insulate creditors from private liability or public 
enforcement. Many suggested that a grace period could apply to 
creditors that demonstrate good faith efforts to comply with the TILA-
RESPA Final Rule and Amendments. Some commenters arguing for an 
effective date later than October 3, 2015, asked for a grace period if 
the Bureau maintained the October 3, 2015, effective date. Some 
commenters supporting a grace period stated that it should last for a 
specific duration.
    Consumer advocacy groups opposed a formal grace period, expressing 
concerns about consumer protection, precedential value, and the 
Bureau's legal authority to implement a formal grace period. The 
consumer advocacy groups noted that regulators already have the 
discretion not to sanction creditors and that various existing 
provisions of TILA protect creditors acting in good faith.
    Some industry commenters, including various credit unions and their 
trade associations, requested an optional ``dual compliance'' period 
before the effective date. During such a dual compliance period, the 
commenters stated that creditors should have the option to test their 
systems by using the new integrated disclosures in real-life 
transactions or continue using the current disclosures. A law firm 
commenter that supported an optional dual compliance period stated that 
creditors that are already prepared for an August 2015 effective date 
should not be penalized by being forced to wait until October or later.
    Other industry commenters, including a technology vendor and a 
title underwriter, opposed a dual compliance period and stated that it 
would increase the risk of errors, create a competitive disadvantage 
for some (likely smaller) industry members not using the new 
disclosures, complicate the flow of information for secondary market 
investors, and increase the risk of consumer confusion.
    The Bureau also received a number of other comments that did not 
relate, even indirectly, to the effective date and therefore are not 
discussed in this preamble.\20\
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    \20\ For example, the Bureau received a large number of comments 
asking it to revisit the requirement to identify owner's title 
insurance as ``optional'' and the method of disclosure of owner's 
and lender's title insurance when there is a discount for 
simultaneous issuance of both policies. A large number of commenters 
also suggested that the Bureau should require creditors' disclosures 
to separately itemize an appraiser's charge versus related charges 
for an appraisal management company. The Bureau considered the same 
arguments presented by these commenters in the TILA-RESPA Final Rule 
and did not open its decisions to notice-and-comment rulemaking in 
the Proposed Rule. Therefore, these comments are outside the scope 
of this rulemaking.
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B. Final Rule

Effective Date of October 3, 2015
    The Bureau is adopting an October 3, 2015, effective date for the 
TILA-RESPA Final Rule and Amendments, as proposed.
    The Bureau concludes that implementation of the TILA-RESPA Final 
Rule and Amendments will provide significant benefits to consumers and 
that the earliest practically feasible implementation date remains 
essential to aid consumer understanding of mortgage loan transactions. 
The TILA-RESPA Final Rule and Amendments significantly strengthen and 
streamline the mortgage loan disclosures provided to consumers. The 
Bureau believes the TILA-RESPA Final Rule and Amendments will deliver 
significant value to consumers, among other ways, by helping: (1) To 
ensure that consumers understand the costs, risks, and benefits of 
their loans at a time when they can still negotiate the terms of, or 
walk away from, the transaction; and (2) to minimize changes at the 
closing table and make it easier for consumers to understand how and 
why any costs may have changed.\21\
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    \21\ 78 FR 79730, 80071 (Dec. 31, 2013).

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[[Page 43915]]

    However, given the CRA requirements discussed above, the TILA-RESPA 
Final Rule and Amendments cannot take effect on August 1, 2015, and 
therefore the effective date must be moved to the CRA Effective Date or 
later. Having reviewed and considered the comments, the Bureau 
continues to believe that a brief delay beyond the CRA Effective Date 
may minimize costs to consumers and those segments of industry that 
have worked diligently to implement on time, while allowing all 
industry participants time to adjust their operations to a new 
effective date. The Bureau recognizes that the unusual circumstances of 
this rulemaking place extensive implementation challenges on industry 
in stopping and restarting progress toward implementation.
    The Bureau has considered comments supporting both earlier and 
later effective dates than October 3, 2015. The Bureau continues to 
believe that a date before the beginning of October would pose large 
implementation challenges for much of industry, given the time required 
to adjust to a new effective date. Further delaying implementation to 
the beginning of 2016, as many commenters suggested, would impose large 
costs on consumers denied the benefits of the TILA-RESPA Final Rule. 
Moreover, multiple commenters indicated that industry would incur 
additional costs should the Bureau finalize a different effective date 
than October 3, 2015, because many industry participants of necessity 
have relied on the Bureau's proposed October 3, 2015, date in taking 
steps towards adjusting their implementation schedules and operations. 
Absent compelling evidence demonstrating the objective superiority of a 
different effective date, the Bureau is reluctant to impose further 
costs on industry.
    The Bureau has also considered the comments regarding the day of 
the week and time during the month. While industry commenters did not 
express a uniform preference for Saturday, many expressed a preference 
for a weekend day. Additionally, the Bureau notes that, since November 
2013, industry has been preparing for implementation of the TILA-RESPA 
Final Rule with the understanding that implementation would occur on a 
Saturday, at the beginning of the month. Again, absent compelling 
arguments to the contrary, the Bureau believes it is preferable to 
minimize disruptions to settled industry expectations.
    The Bureau acknowledges that at least one commenter expressed 
concern about an implementation date near the start of a quarter. 
However, this view was not widely expressed. Many commenters who 
expressed a preference for another effective date, e.g., January 1, 
2016, also recommended one near the start of a quarter. Taking into 
account the various opinions expressed in the comments, the Bureau 
believes that an effective date near the start of a quarter will not 
pose unreasonable implementation challenges to industry. Moreover, the 
Bureau must balance the costs of additional delay to consumers and 
those segments of industry that have worked diligently to prepare, the 
general concern about mid-month implementation, and the need for some 
additional time for industry to adjust to the new effective date. 
Balancing those concerns, the Bureau believes that an effective date of 
October 3, 2015, is the earliest practically feasible date.
    The Bureau recognizes, as it always has, that the TILA-RESPA Final 
Rule and Amendments require major operational changes for industry and 
close coordination among many different parties. At the same time, the 
Bureau concludes that the original nearly 21-month implementation 
period together with two additional months, coupled with the Bureau's 
extensive regulatory implementation support efforts, should afford all 
participants a reasonable opportunity to come into compliance with the 
TILA-RESPA Final Rule and Amendments by October 3, 2015.
Technical Issues Regarding Effective Date
    In response to some commenters' requests for clarification, this 
final rule changes the effective date to October 3, 2015, for all 
provisions of the TILA-RESPA Final Rule and Amendments.\22\ The 
technical amendments also take effect on October 3, 2015, the same 
effective date as the TILA-RESPA Final Rule and Amendments.\23\ Some 
commenters specifically asked whether the change in effective date to 
October 3, 2015, applies to the post-consummation notice requirements 
including Sec. Sec.  1026.20(e) and 1026.39(d)(5). As discussed in the 
TILA-RESPA Final Rule, implementation of the Dodd-Frank Act disclosures 
in Sec. Sec.  1026.20(e) and 1026.39(d)(5) becomes mandatory on the 
effective date, now October 3, 2015.\24\ As discussed further in part 
VII below, the portions of this final rule related to the delay in the 
effective date to October 3, 2015, are effective immediately upon 
publication in order to move the effective date for the TILA-RESPA 
Final Rule and Amendments and the amendatory instruction discussed in 
note 4 from August 1, 2015 to October 3, 2015. As a result of this 
final rule, the provisions of the TILA-RESPA Final Rule and Amendments, 
as well as the technical amendments and corrections made in this final 
rule, are not effective immediately upon publication, but on October 3, 
2015.
---------------------------------------------------------------------------

    \22\ As explained in the section-by-section analysis of Sec.  
1026.43 below, this final rule also delays from August 1, 2015, 
until October 3, 2015, an amendatory instruction issued in 
conjunction with the Amendments to the 2013 Mortgage Rules Under the 
Truth in Lending Act (Regulation Z).
    \23\ This final rule also makes technical corrections to two 
provisions in Sec.  1026.38, which are effective on October 3, 2015, 
the same effective date as the TILA-RESPA Final Rule and Amendments.
    \24\ 78 FR 79730, 79753 (Dec. 31, 2013).
---------------------------------------------------------------------------

    In response to one law firm commenter's assertion that the Proposed 
Rule fails to amend the amendatory instruction to Sec.  
1026.36(g)(2)(ii) in the TILA-RESPA Amendments by revising the 
effective date from August 1, 2015, to October 3, 2015, the Bureau 
disagrees. The Bureau proposed to change the effective date of both the 
TILA-RESPA Final Rule and the TILA-RESPA Amendments to October 3, 2015. 
The proposed change to the effective date would apply to all amendatory 
instructions for both rules, including the TILA-RESPA Amendments' 
amendatory instruction to Sec.  1026.36(g)(2)(ii).
Requests for a Formal Grace Period or a Dual Compliance Period
    With regard to some commenters' requests for a formal grace period 
or a dual compliance period, the Bureau considered and rejected similar 
arguments when it finalized the TILA-RESPA Final Rule.\25\ The Bureau 
did not seek comments on these issues in this rulemaking and, for the 
reasons expressed in the TILA-RESPA Final Rule and herein, is not 
instituting either a formal grace period or a dual compliance period.
---------------------------------------------------------------------------

    \25\ See, e.g., 78 FR 79730, 80066-68, 80072-73 (2013).
---------------------------------------------------------------------------

    Although many commenters requested a formal grace period, the 
Bureau continues to believe that the original implementation period 
from November 2013 to August 2015, coupled with the Bureau's extensive 
regulatory implementation support initiative, afforded creditors 
adequate time to implement the TILA-RESPA Final Rule under the original 
effective date. The Bureau also believes that the additional time 
afforded by the October 3 effective date adequately accounts for the 
challenges of adjusting to a new date.
    At the same time, the Bureau recognizes, as it always has, that the 
TILA-RESPA Final Rule poses

[[Page 43916]]

significant implementation challenges for industry. The Bureau 
continues to believe that the approach expressed in Director Cordray's 
letter to members of Congress on June 3, 2015, remains appropriate:

    [O]ur oversight of the implementation of the Rule will be 
sensitive to the progress made by those entities that have squarely 
focused on making good-faith efforts to come into compliance with 
the Rule on time. My statement . . . is consistent with the approach 
we took to implementation of the Title XIV mortgage rules in the 
early months after the effective dates in January 2014, which has 
worked out well.\26\
---------------------------------------------------------------------------

    \26\ Letter from Director Richard Cordray, CFPB, to 
Representatives Andy Barr and Carolyn B. Maloney, U.S. House of 
Representatives (June 3, 2015). See also Know Before You Owe: You'll 
Get 3 Days to Review Your Mortgage Closing Documents, CFPB Blog 
(June 3, 2015), https://www.consumerfinance.gov/blog/know-before-you-owe-youll-get-3-days-to-review-your-mortgage-closing-documents/.

    The Bureau considered arguments regarding dual compliance when it 
issued the TILA-RESPA Final Rule in November 2013 in the context of 
evaluating whether different creditors should be subject to different 
effective dates.\27\ While the Bureau recognizes that the delay in the 
effective date imposes costs on the many creditors who have worked 
diligently to be ready for the original August 1 effective date, the 
Bureau continues to share the concerns of commenters both to the 2012 
TILA-RESPA Proposal and to the Proposed Rule finalized here that dual 
compliance could be confusing to consumers and complicated for 
industry, including vendors, the secondary market, and institutions who 
act both as correspondent lenders and originators. The Bureau is not 
persuaded that a dual compliance period would be beneficial. For these 
reasons, the Bureau declines to institute a dual compliance period.
---------------------------------------------------------------------------

    \27\ See, e.g., 78 FR 79730, 80066, 80068, 80073 (2013) 
(discussing comments requesting a bifurcated implementation period 
depending on the size of the institution).
---------------------------------------------------------------------------

VI. Section-by-Section Analysis

Section 1026.1 Authority, Purpose, Coverage, Organization, Enforcement, 
and Liability

1(d) Organization
1(d)(5)
    Comment 1(d)(5)-1 provides clarity regarding the application of the 
effective date to transactions covered by the TILA-RESPA Final Rule and 
Amendments. The Bureau proposed conforming amendments to comment 
1(d)(5)-1 to reflect the proposed change in effective date to October 
3, 2015. The Bureau received no comments specifically relating to 
comment 1(d)(5)-1, other than the general comments relating to the 
effective date that are discussed in part V above. The Bureau is 
finalizing comment 1(d)(5)-1 as proposed.

Section 1026.19 Certain Mortgage and Variable-Rate Transactions

19(g) Special Information Booklet at Time of Application
19(g)(2) Permissible Changes
    Comment 19(g)(2)-3 refers to the general restriction on changing 
the settlement cost booklet's title under Sec.  1026.19(g)(2)(iv). The 
Bureau proposed conforming amendments to comment 19(g)(2)-3 to reflect 
the proposed change in effective date to October 3, 2015. The Bureau 
received no comments specific to the amendments to comment 19(g)(2)-3, 
other than the general comments relating to the effective date that are 
discussed in part V above. The Bureau is finalizing the amendments to 
comment 19(g)(2)-3 as proposed.

Section 1026.38 Content of Disclosures for Certain Mortgage 
Transactions (Closing Disclosure)

38(i) Calculating Cash to Close
38(i)(8) Adjustments and Other Credits
    The Calculating Cash to Close table in the Closing Disclosure under 
Sec.  1026.38(i) generally mirrors the format of, and updates the 
amounts shown on, the Calculating Cash to Close table in the Loan 
Estimate under Sec.  1026.37(h). To determine the amount of cash or 
other funds the consumer is to provide at consummation, the tables must 
account for the sales price of any tangible personal property being 
sold in a purchase real estate transaction that is excluded from the 
contract sales price, as disclosed under Sec.  1026.38(j)(1)(iii). The 
TILA-RESPA Final Rule does not specify a place within the Calculating 
Cash to Close table on the Closing Disclosure for this amount. However, 
comment 37(h)(1)(vii)-6, relating to the Calculating Cash to Close 
table on the Loan Estimate, indicates that the sales price of 
additional personal property can be included in the Adjustments and 
Other Credits amount. To conform this aspect of the Closing Disclosure 
to the Loan Estimate, the Bureau is amending Sec.  1026.38(i)(8)(ii) to 
include the amount disclosed under Sec.  1026.38(j)(1)(iii) in the 
amount disclosed as ``Final'' for Adjustments and Other Credits. This 
change will ensure that the Calculating Cash to Close table on the 
Closing Disclosure accurately reflects the total amount of cash or 
other funds that the consumer must provide at consummation and will 
complete the alignment of the disclosure of Adjustments and Other 
Credits between the Closing Disclosure and the Loan Estimate. The 
Bureau believes this is consistent with industry expectations of the 
proper disclosure of the Adjustments and Other Credits on both the Loan 
Estimate and Closing Disclosure and will reduce uncertainty in 
implementation by confirming that the calculation of Adjustments and 
Other Credits is the same on both the Closing Disclosure and the Loan 
Estimate.
    The Bureau is also making a conforming change to Sec.  
1026.38(i)(8)(iii)(A). That paragraph requires creditors to disclose 
the basis for any difference between the Adjustments and Other Credits 
disclosed on the Loan Estimate and the Adjustments and Other Credits 
disclosed as ``Final'' on the Closing Disclosure (unless the difference 
is due to rounding). As explained in comment 38(i)-3, creditors may 
disclose the basis for the difference by providing a general or 
specific line cross-reference to the Summaries of Transactions table. 
This conforming change will permit creditors to cross-reference to the 
personal property sales price disclosed under Sec.  1026.38(j)(1)(iii) 
as a basis for the calculation of the amount disclosed under Sec.  
1026.38(i)(8)(ii). This modification is unlikely to change creditors' 
practice because creditors may provide consumers with a more general 
cross-reference to the Summaries of Transactions table and need not 
provide a specific line cross-reference.
    These changes to Sec.  1026.38(i)(8) will also ensure that the 
amount disclosed as due to or from the consumer in the Calculating Cash 
to Close table on the Closing Disclosure matches the amount disclosed 
as due to or from the consumer in the Summaries of Transactions table 
on the Closing Disclosure. As alignment between these two disclosures 
is required by existing comment 38(i)(9)(ii)-1, this change should 
facilitate implementation and is consistent with existing industry 
preparations and informal guidance provided by the Bureau.
38(j) Summary of Borrower's Transaction
38(j)(1) Itemization of Amounts Due From Borrower
38(j)(1)(iv)
    In the TILA-RESPA Final Rule, Sec.  1026.38(j) provides for a 
summary of

[[Page 43917]]

the borrower's transaction on the Closing Disclosure. The total amount 
due from or to the consumer at the real estate closing in this 
Summaries of Transactions table should match the disclosure of the 
``Final'' cash to close on the Calculating Cash to Close table pursuant 
to Sec.  1026.38(i)(9)(ii) (as explained in comment 38(i)(9)(ii)-1).
    For the Summaries of Transactions table, the disclosure of the 
total amount of closing costs that are designated borrower-paid at 
closing is specified in Sec.  1026.38(j)(1)(iv). In the TILA-RESPA 
Final Rule, Sec.  1026.38(j)(1)(iv) provides that the total amount of 
closing costs disclosed that are designated borrower-paid at closing is 
calculated pursuant to Sec.  1026.38(h)(2). As originally proposed in 
the 2012 TILA-RESPA Proposal, Sec.  1026.38(h)(2) included the lender 
credits described in Sec.  1026.38(h)(3).\28\ In the TILA-RESPA Final 
Rule, however, the Bureau removed the lender credits set forth in Sec.  
1026.38(h)(3) from the calculation in Sec.  1026.38(h)(2) in order to 
reconcile the Calculating Cash to Close table in Sec.  1026.38(i). In 
doing so, the Bureau inadvertently failed to adjust Sec.  
1026.38(j)(1)(iv) to include the lender credits disclosed pursuant to 
Sec.  1026.38(h)(3).
---------------------------------------------------------------------------

    \28\ 77 FR 51116, 51324 (Aug. 23, 2012).
---------------------------------------------------------------------------

    As a result, under the TILA-RESPA Final Rule, the total amount due 
from or to the consumer at the real estate closing in the Summaries of 
Transactions table may not match the ``Final'' amount of cash to close 
disclosed in the Calculating Cash to Close table under Sec.  
1026.38(i)(9)(ii). To correct this, the Bureau is modifying Sec.  
1026.38(j)(1)(iv) to require disclosure of the sum of the amount 
disclosed under Sec.  1026.38(h)(2) and the amount of any lender 
credits disclosed as a negative number under Sec.  1026.38(h)(3). The 
lender credits described in Sec.  1026.38(h)(3) are appropriately and 
necessarily included in the summary of the borrower's transaction as an 
offsetting credit to the amount due from the borrower at closing. This 
change makes the Summaries of Transactions table accurately reflect the 
total amount due from or to the consumer at the real estate closing; 
comports the disclosure of the ``Final'' amount of cash to close in the 
Calculating Cash to Close table with the amount disclosed in the 
Summaries of Transactions table as required by existing comment 
38(i)(9)(ii)-1; and is consistent with informal guidance provided by 
the Bureau.

Section 1026.43 Minimum Standards for Transactions Secured by a 
Dwelling

43(e) Qualified Mortgages
43(e)(3) Limits on Points and Fees for Qualified Mortgages
43(e)(3)(iv)
    In addition to proposing the amendments discussed above, the Bureau 
proposed one amendment to an amendatory instruction that relates to the 
Amendments to the 2013 Mortgage Rules Under the Truth in Lending Act 
(Regulation Z).\29\ Specifically, the Bureau proposed to amend 
instruction 5, which is drafted so the comment referenced would take 
effect on August 1, 2015, to coordinate with the original effective 
date of the TILA-RESPA Final Rule. The amendatory instruction relating 
to comment 43(e)(3)(iv)-2, Relationship to RESPA tolerance cure, will 
replace an existing comment clarifying the relationship between 
tolerance cures under RESPA and Regulation Z points and fees cures with 
a comment that incorporates the tolerance cure provisions of Sec.  
1026.19(f)(2)(v) under the TILA-RESPA Final Rule. The Bureau proposed 
to have the instruction take effect on October 3, 2015, instead of 
August 1, 2015, to preserve this coordination. The Bureau received no 
comments specifically relating to this proposed amendment. The Bureau 
is finalizing this change to the amendatory instruction as proposed.
---------------------------------------------------------------------------

    \29\ 79 FR 65300, 65325 (Nov. 3, 2014).
---------------------------------------------------------------------------

VII. Administrative Procedure Act

5 U.S.C. 553(b)

    In the Proposed Rule, the Bureau provided notice and an opportunity 
for public comment with respect to its proposal to delay the effective 
date of the TILA-RESPA Final Rule and Amendments and to make certain 
technical amendments to the Official Interpretations of Regulation Z 
related to the proposed new effective date. In this final rule, the 
Bureau is also finalizing technical corrections to Sec.  
1026.38(i)(8)(ii) and (iii)(A) and Sec.  1026.38(j)(1)(iv). The Bureau 
did not seek public comment on these technical corrections but finds 
that there is good cause to publish them without notice and comment. 
Under the Administrative Procedure Act (APA), notice and opportunity 
for public comment are not required if the Bureau finds that notice and 
public procedure thereon are impracticable, unnecessary, or contrary to 
the public interest.\30\ The Bureau has determined that notice and 
comment are unnecessary because the technical corrections to Sec.  
1026.38(i)(8)(ii) and (iii)(A) and Sec.  1026.38(j)(1)(iv) in this 
final rule correct inadvertent, technical errors and merely align and 
harmonize those provisions with other provisions of the TILA-RESPA 
Final Rule. Furthermore, the technical corrections clarify the 
operation of the TILA-RESPA Final Rule in a way that is consistent with 
informal guidance provided by the Bureau and with industry 
preparations. The Bureau believes that there is minimal, if any, basis 
for substantive disagreement with these technical corrections. 
Therefore, the technical corrections to Sec.  1026.38(i)(8)(ii) and 
(iii)(A) and Sec.  1026.38(j)(1)(iv) are adopted in final form.
---------------------------------------------------------------------------

    \30\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------

5 U.S.C. 553(d)

    Section 553(d) of the APA generally requires that the effective 
date of a final rule be at least 30 days after publication of that 
final rule, except for (1) a substantive rule which grants or 
recognizes an exemption or relieves a restriction; (2) interpretive 
rules or statements of policy; or (3) as otherwise provided by the 
agency for good cause found and published with the rule.\31\ The Bureau 
finds that there is good cause for making the portions of this final 
rule related to delaying the effective date effective immediately upon 
publication in the Federal Register. These portions do not establish 
any requirements; instead, they delay the effective date of the TILA-
RESPA Final Rule and Amendments and the amendatory instruction 
referenced in note 4 until October 3, 2015. Therefore, under section 
553(d)(1) of the APA, the Bureau is publishing these portions less than 
30 days before the effective date of this final rule because they are 
substantive rules which grant or recognize an exemption or relieve a 
restriction. Further, delaying the effective date of the TILA-RESPA 
Final Rule and Amendments will ensure an orderly change to the new 
integrated disclosures and will synchronize the effective date of the 
Amendments with that of the TILA-RESPA Final Rule. Thus, this final 
rule will facilitate compliance and help reduce industry and consumer 
confusion and market disruption. Therefore, the Bureau also finds it 
has good cause pursuant to section 553(d)(3) of the APA to dispense 
with the 30-day delayed effective date requirement for this final rule 
because, on balance, the need to implement immediately the delay of the 
August 1, 2015, effective

[[Page 43918]]

date to October 3, 2015, outweighs the need for affected parties to 
prepare for this delay.
---------------------------------------------------------------------------

    \31\ 5 U.S.C. 553(d).
---------------------------------------------------------------------------

VIII. Section 1022(b)(2) of the Dodd-Frank Act

A. Overview

    In developing this final rule, the Bureau has considered potential 
benefits, costs, and impacts.\32\ The Bureau has consulted, or offered 
to consult, with the prudential regulators; the Federal Housing Finance 
Agency; the Federal Trade Commission; the U.S. Department of 
Agriculture; the U.S. Department of Housing and Urban Development; the 
U.S. Department of Housing and Urban Development, Office of the 
Inspector General; the U.S. Department of the Treasury; the U.S. 
Department of Veterans Affairs; and the U.S. Securities and Exchange 
Commission. The Bureau's consultation and offer of consultation 
included assessing consistency with any prudential, market, or systemic 
objectives administered by such agencies.
---------------------------------------------------------------------------

    \32\ Specifically, section 1022(b)(2)(A) of the Dodd-Frank Act 
calls for the Bureau to consider the potential benefits and costs of 
a regulation to consumers and covered persons, including the 
potential reduction of access by consumers to consumer financial 
products or services; the impact on depository institutions and 
credit unions with $10 billion or less in total assets as described 
in section 1026 of the Dodd-Frank Act; and the impact on consumers 
in rural areas.
---------------------------------------------------------------------------

    The Bureau requested comment on the preliminary analysis presented 
in the Proposed Rule, as well as submissions of additional data that 
could inform the Bureau's analysis of the benefits, costs, and impacts 
of the Proposed Rule. Because the TILA-RESPA Final Rule and Amendments 
cannot take effect before the CRA Effective Date, the Bureau has 
evaluated the benefits, costs, and impacts of this final rule, assuming 
that the TILA-RESPA Final Rule and Amendments would become effective on 
August 15 absent this final rule. The Bureau has relied on a variety of 
data sources to consider the potential benefits, costs, and impacts of 
this final rule. In some instances, the requisite data are not 
available or are quite limited. Data with which to quantify the 
benefits of this final rule are particularly limited. As a result, 
portions of this analysis rely in part on general economic principles 
to provide a qualitative discussion of the benefits, costs, and impacts 
of this final rule.
    As a result of this final rule, affected covered persons will incur 
costs associated with delaying implementation from the CRA Effective 
Date until October 3, 2015. These costs include communication with and 
training of staff, software programming, vendor and outside supplier 
coordination, advertising and product development costs, and broker and 
settlement agent coordination. The Bureau believes that these costs are 
likely higher for larger creditors and creditors that rely primarily on 
proprietary systems rather than on third-party software vendors.\33\ 
While many of these costs are largely incurred with the initial delay 
to the CRA Effective Date, affected entities may incur additional costs 
for subsequent delay beyond the CRA Effective Date, including ongoing 
training, testing, and opportunity costs.
---------------------------------------------------------------------------

    \33\ As in the section 1022(b)(2) analysis of the TILA-RESPA 
Final Rule, the Bureau believes that approximately 5 percent of 
creditors do not rely on third-party vendors. See 78 FR 79730, 
80081, 80101 (Dec. 31, 2013).
---------------------------------------------------------------------------

    Similarly, consumers will incur costs associated with delaying the 
effective date. These costs will consist mostly of delayed benefits 
described in the section 1022(b)(2) analysis of the TILA-RESPA Final 
Rule, primarily improved consumer understanding of mortgage loan 
transactions and an increased ability to shop for a mortgage loan. The 
longer the delay in the implementation of the TILA-RESPA Final Rule and 
Amendments, the greater will be the cost to consumers from not 
receiving the benefits of the new integrated disclosures.
    This final rule amends the effective date of the TILA-RESPA Final 
Rule and Amendments. In the section 1022(b)(2) analyses of the TILA-
RESPA Final Rule and Amendments, the Bureau previously considered the 
costs, benefits, and impact of the rules. This final rule also contains 
technical corrections to two provisions of the TILA-RESPA Final Rule. 
These technical corrections are necessary to resolve minor 
inconsistencies in the TILA-RESPA Final Rule and are consistent with 
informal guidance provided by the Bureau. Thus, the Bureau believes 
that creditors will not be adversely affected by these technical 
corrections and will enjoy additional certainty when originating loans. 
Given that the Bureau believes that the vast majority of creditors 
would have implemented their systems in a manner consistent with these 
technical corrections regardless of this final rule, the Bureau does 
not believe that these technical corrections will have a discernible 
impact on consumers.

B. Potential Benefits and Costs to Consumers and Covered Persons

    The primary consumers who will be affected by this final rule are 
consumers that engage in mortgage shopping between the CRA Effective 
Date and October 3, 2015. Those consumers will be harmed by not 
receiving the benefits of the TILA-RESPA Final Rule and Amendments. 
Consumers shopping for a mortgage during the period of delay in the 
effective date will not receive those benefits, even if they close on 
their loans after the delayed effective date. The benefits of the TILA-
RESPA Final Rule and Amendments include easier-to-understand 
disclosures and the requirement that the creditor deliver the Closing 
Disclosure containing the settlement information as well as the TILA 
disclosures at least three days before closing.\34\ Some consumers may 
benefit if the delay results in the industry using the time before 
October 3 for more system testing or other preparation, leading to a 
smoother transition to the new integrated disclosures. As in the TILA-
RESPA Final Rule, the Bureau cannot quantify either the benefit or the 
cost of this final rule to consumers.
---------------------------------------------------------------------------

    \34\ These and other benefits are described in detail in the 
section 1022(b)(2) analysis of the TILA-RESPA Final Rule. 78 FR 
79730, 80073-89 (Dec. 31, 2013).
---------------------------------------------------------------------------

    As in the TILA-RESPA Final Rule, for purposes of this section 
1022(b)(2) analysis, the Bureau has considered three categories of 
affected covered persons that will benefit or incur adjustment costs: 
Creditors that engage in mortgage lending, mortgage brokers, and 
settlement agents.\35\ The Bureau estimates that, in 2014, there were 
about 11,150 creditors engaged in mortgage lending, about 7,000 
mortgage brokers, and about 7,700 settlement agent firms.\36\ As noted 
in part V above, due

[[Page 43919]]

to industry's implementation challenges, the Bureau believes that the 
delay of the effective date beyond the CRA Effective Date could benefit 
many of these creditors, mortgage brokers, and settlement agents, by 
allowing them more time to transition to the new integrated disclosures 
required by the TILA-RESPA Final Rule and Amendments and by diminishing 
the magnitude of any potential disruptions associated with the 
transition. The delay in the effective date could also benefit them to 
the extent that it allows them to delay incurring any of the costs 
described in the TILA-RESPA Final Rule section 1022(b)(2) analysis.\37\
---------------------------------------------------------------------------

    \35\ Some service providers, such as software vendors, will 
incur costs, as well, as they update their products to comply with 
this final rule, but these are not covered persons for the purposes 
of this analysis.
    \36\ The primary source of data used in this analysis is 2013 
data collected under the Home Mortgage Disclosure Act (HMDA). The 
empirical analysis also uses data from the 4th quarter 2013 bank and 
thrift Call Reports, and the 4th quarter 2013 credit union Call 
Reports from the National Credit Union Administration, to identify 
financial institutions and their characteristics. Unless otherwise 
specified, the numbers provided include appropriate projections made 
to account for any missing information, for example, any 
institutions that do not report under HMDA. The Bureau also utilizes 
data from the Bureau of Labor Statistics of the U.S. Department of 
Labor.
    The Bureau analyzes data from all creditors, both the ones that 
report under HMDA and the ones that do not, with the exception of 
non-depository institutions that do not report under HMDA. For HMDA 
reporters, the Bureau uses the data reported. For HMDA non-
reporters, the Bureau uses projections based on the match of the 
Call Report data with HMDA.
    \37\ See 78 FR 79730, 80073-89 (Dec. 31, 2013).
---------------------------------------------------------------------------

    Creditors and other affected persons might also incur costs due to 
the delay of the effective date of the TILA-RESPA Final Rule and 
Amendments. The Bureau estimated in its section 1022(b)(2) analysis of 
the TILA-RESPA Final Rule that 95 percent of creditors (about 10,600) 
rely on third-party vendors for their software, and the Bureau 
estimates that these creditors will not incur significant software 
programming costs.\38\ However, for the 5 percent of creditors 
(approximately 560) that do not rely on third-party vendors, the change 
of the effective date will require additional programming expense. 
While a portion of this cost is already imposed by the delay in the 
effective date to the CRA Effective Date and therefore is not imposed 
by this final rule, the Bureau believes that some of this cost might be 
greater with the delay of the effective date to October 3. The Bureau 
specifically requested comment on the extent of programming expense but 
received no specific comments thereon.
---------------------------------------------------------------------------

    \38\ Id. at 80081, 80101.
---------------------------------------------------------------------------

    Moreover, the delay might also require rearranging already 
established operational schedules and business processes. This 
potential disruption might be costly and require additional effort from 
employees and additional expenses due to, for example, overtime pay. 
This potential disruption might especially affect creditors not relying 
primarily on third-party vendors. The Bureau believes that mortgage 
brokers and settlement agents will incur similar coordination and 
implementation costs.
    Finally, affected covered persons will incur costs in internal 
communications, training, and software re-programming, among other 
costs. The Bureau believes that the change in the effective date might 
require communicating with any external suppliers of forms and booklets 
and potentially ordering additional forms in the current format. Any 
pre-ordered Loan Estimates or Closing Disclosures that comply with the 
TILA-RESPA Final Rule and Amendments will still be usable after October 
3, and the Bureau does not believe that the current forms are 
significantly more expensive than the ones that are required by the 
TILA-RESPA Final Rule and Amendments; thus, there should be no net 
increase in expense of procuring forms and booklets. While many of 
these costs are already imposed as a result of the delay in the 
effective date to the CRA Effective Date (and therefore are not costs 
imposed by this final rule), the Bureau believes that some of the costs 
may be greater because this final rule further delays the effective 
date until October 3.
    The Bureau is uncertain as to the extent of the foregoing costs. 
The Bureau requested comments on the magnitude of such costs, but there 
were no comments submitted that provided a representative basis for 
quantification. The Bureau is therefore unable to quantify the costs 
for industry participants associated with delaying the effective date 
from the CRA Effective Date to October 3, 2015.

C. Impact on Depository Institutions With No More Than $10 Billion in 
Assets

    The vast majority of the creditors described above have no more 
than $10 billion in assets. The Bureau believes that depository 
institutions with no more than $10 billion in assets will not be 
differentially affected by the extension of the effective date.

D. Impact on Access to Credit

    The Bureau does not believe that there will be an adverse impact on 
credit availability resulting from this final rule.

E. Impact on Rural Areas

    The Bureau does not believe that this final rule will have a unique 
impact on consumers in rural areas.

IX. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA),\39\ as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996,\40\ requires each 
agency to consider the potential impact of its regulations on small 
entities, including small businesses, small governmental units, and 
small nonprofit organizations. The RFA defines a ``small business'' as 
a business that meets the size standard developed by the Small Business 
Administration (SBA) pursuant to the Small Business Act.\41\
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    \39\ Public Law 96-354, 94 Stat. 1164 (1980).
    \40\ Public Law 104-121, section 241, 110 Stat. 847, 864-65 
(1996).
    \41\ 5 U.S.C. 601(3). The Bureau may establish an alternative 
definition after consultation with SBA and an opportunity for public 
comment.
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    The RFA generally requires an agency to conduct an initial 
regulatory flexibility analysis and a final regulatory flexibility 
analysis of any proposed rule subject to notice-and-comment rulemaking 
requirements, unless the agency certifies that the proposed rule will 
not have a significant economic impact on a substantial number of small 
entities. The Bureau also is subject to certain additional procedures 
under the RFA involving the convening of a panel to consult with small 
business representatives prior to proposing a rule for which an initial 
regulatory flexibility analysis is required.
    In the Proposed Rule, the Bureau concluded that the proposed 
extension of the effective date, if adopted, would not have a 
significant economic impact on a substantial number of small entities 
and that an initial regulatory flexibility analysis was therefore not 
required. This final rule adopts the Proposed Rule substantially as 
proposed.\42\ Therefore, a final regulatory flexibility analysis is not 
required.
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    \42\ In addition to adopting the Proposed Rule substantially as 
proposed, this final rule also includes technical corrections to two 
provisions of the TILA-RESPA Final Rule to resolve potential 
inconsistencies in the TILA-RESPA Final Rule requirements that could 
have resulted in creditors being inadvertently out of compliance. 
Under section 601(2) of the RFA, ``rule'' means ``any rule for which 
the agency publishes a general notice of proposed rulemaking 
pursuant to section 553(b) of this title, or any other law[.]'' As 
discussed in Part VII above, the Bureau has found that notice and 
comment are unnecessary for the issuance of these technical 
corrections. Therefore, these technical corrections are not 
considered in the Bureau's RFA certification analysis.
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    As discussed above, this final rule extends the effective date of 
the TILA-RESPA Final Rule and Amendments and technical amendments to 
October 3, 2015.

A. Number and Classes of Affected Entities

    The following table summarizes the estimated number and type of 
entities that will be affected by this final rule.\43\
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    \43\ The Bureau assumes that all mortgage creditor non-
depository institutions are below the Small Business 
Administration's threshold for small entities (annual receipts of 
$38.5 million). See 13 CFR 121.201 (listing applicable size standard 
for NAICS code 522292). Consistent with the TILA-RESPA Final Rule, 
the Bureau has not reviewed the impact on software vendors for the 
purposes of this analysis. 78 FR 79730, 80089-100 (Dec. 31, 2013).

[[Page 43920]]



----------------------------------------------------------------------------------------------------------------
                                                                                     Affected     Small affected
                   Category                                NAICS codes               entities        entities
----------------------------------------------------------------------------------------------------------------
Mortgage Creditors............................  522110, 522120, 522130, 522292..          11,150          10,403
Mortgage Brokers..............................  522310..........................           7,007           6,895
Settlement Agents.............................  541191..........................           7,719           7,580
----------------------------------------------------------------------------------------------------------------

    The Bureau believes that, as in the section 1022(b)(2) analysis of 
the TILA-RESPA Final Rule, 5 percent of all creditors, including small 
creditors, do not utilize software vendors.\44\ Small creditors who do 
not use software vendors could incur greater costs, but the fraction of 
small creditors incurring these costs (at most 5 percent) is not 
substantial.
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    \44\ 78 FR 79730, 80081 (Dec. 31, 2013).
---------------------------------------------------------------------------

B. Certification

    Accordingly, the undersigned hereby certifies that this final rule 
will not have a significant economic impact on a substantial number of 
small entities.

X. Paperwork Reduction Act Analysis

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), Federal agencies are generally required to seek Office of 
Management and Budget (OMB) approval for information collection 
requirements prior to implementation. Under the PRA, the Bureau may not 
conduct or sponsor and, notwithstanding any other provision of law, a 
person is not required to respond to an information collection unless 
the information collection displays a currently valid control number 
assigned by OMB. The collections of information related to the TILA-
RESPA Final Rule, Integrated Mortgage Disclosures Under the Real Estate 
Settlement Procedures Act (Regulation X) and the Truth In Lending Act 
(Regulation Z) (78 FR 79730), have been previously reviewed and 
approved by OMB in accordance with the PRA and assigned OMB Control 
Numbers 3170-0015 (Regulation Z) and 3170-0016 (Regulation X). These 
OMB approvals will become active on October 3, 2015, the effective date 
of the TILA-RESPA Final Rule as established herein.
    The Bureau has determined that this final rule would not have any 
new or revised information collection requirements (recordkeeping, 
reporting, or disclosure requirements) on covered entities or members 
of the public that would constitute collections of information 
requiring OMB approval under the PRA.

List of Subjects in 12 CFR Part 1026

    Advertising, Consumer protection, Credit, Credit unions, Mortgages, 
National banks, Recordkeeping and recordkeeping requirements, 
Reporting, Savings associations, Truth in lending.

Authority and Issuance

    For the reasons set forth in the preamble, the Bureau amends 
Regulation Z, 12 CFR part 1026, as set forth below:

PART 1026--TRUTH IN LENDING (REGULATION Z)

0
1. The authority citation for part 1026 continues to read as follows:

    Authority:  12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 5511, 
5512, 5532, 5581; 15 U.S.C. 1601 et seq.


0
2. In amendatory instruction 5 appearing on page 65325 in the Federal 
Register on November 3, 2014, change ``Effective August 1, 2015'' to 
read ``Effective October 3, 2015.''

Subpart E--Special Rules for Certain Home Mortgage Transactions

0
3. Section 1026.38 is amended by revising paragraphs (i)(8)(ii), 
(i)(8)(iii)(A), and (j)(1)(iv) to read as follows:


Sec.  1026.38  Content of disclosures for certain mortgage transactions 
(Closing Disclosure).

* * * * *
    (i) * * *
    (8) * * *
    (ii) Under the subheading ``Final,'' the amount equal to the total 
of the amounts disclosed under paragraphs (j)(1)(iii) and (v) through 
(x) of this section reduced by the total of the amounts disclosed under 
paragraphs (j)(2)(vi) through (xi) of this section.
    (iii) * * *
    (A) If the amount disclosed under paragraph (i)(8)(ii) of this 
section is different than the amount disclosed under paragraph 
(i)(8)(i) of this section (unless the difference is due to rounding), a 
statement of that fact, along with a statement that the consumer should 
see the details disclosed under paragraphs (j)(1)(iii) and (v) through 
(x) and (j)(2)(vi) through (xi) of this section; or
* * * * *
    (j) * * *
    (1) * * *
    (iv) The total amount of closing costs disclosed that are 
designated borrower-paid at closing, as the sum of the amounts 
calculated pursuant to paragraphs (h)(2) and (3) of this section, 
labeled ``Closing Costs Paid at Closing'';
* * * * *

0
4. In Supplement I to Part 1026--Official Interpretations, as amended 
by 78 FR 79730 (Dec. 31, 2013):
0
A. Under Section 1026.1--Authority, Purpose, Coverage, Organization, 
Enforcement and Liability, under Paragraph 1(d)(5), paragraph 1 is 
revised.
0
B. Under Section 1026.19--Certain Mortgage and Variable-Rate 
Transactions, under 19(g)(2) Permissible changes, paragraph 3 is 
revised.
    The revisions read as follows:

Supplement I to Part 1026--Official Interpretations

* * * * *

Subpart A--General

Section 1026.1--Authority, Purpose, Coverage, Organization, Enforcement 
and Liability
* * * * *
1(d) Organization
Paragraph 1(d)(5)
    1. Effective date. The Bureau's revisions to Regulation X and 
Regulation Z published on December 31, 2013 (the TILA-RESPA Final 
Rule), apply to covered loans (closed-end credit transactions secured 
by real property) for which the creditor or mortgage broker receives an 
application on or after October 3, 2015 (the ``effective date''), 
except that new Sec.  1026.19(e)(2), the amendments to Sec.  
1026.28(a)(1), and the amendments to the commentary to Sec.  1026.29, 
become effective on October 3, 2015, without respect to whether an 
application has been received. The provisions of Sec.  1026.19(e)(2) 
apply prior to a consumer's receipt of the disclosures required by 
Sec.  1026.19(e)(1)(i), and therefore, restrict activity that may occur 
prior to receipt of an application by a creditor or mortgage broker 
under Sec.  1026.19(e). These provisions include Sec.  
1026.19(e)(2)(i), which restricts the fees that may be imposed on a 
consumer, Sec.  1026.19(e)(2)(ii), which requires a statement to be 
included on written estimates of terms or costs

[[Page 43921]]

specific to a consumer, and Sec.  1026.19(e)(2)(iii), which prohibits 
creditors from requiring the submission of documents verifying 
information related to the consumer's application. Accordingly, the 
provisions under Sec.  1026.19(e)(2) are effective on October 3, 2015, 
without respect to whether an application has been received on that 
date. In addition, the amendments to Sec.  1026.28 and the commentary 
to Sec.  1026.29 govern the preemption of State laws and thus, the 
amendments to those provisions and associated commentary made by the 
TILA-RESPA Final Rule are effective on October 3, 2015, without respect 
to whether an application has been received on that date. The following 
examples illustrate the application of the effective date for the TILA-
RESPA Final Rule.
    i. General. Assume a creditor receives an application, as defined 
under Sec.  1026.2(a)(3) of the TILA-RESPA Final Rule, for a 
transaction subject to Sec.  1026.19(e) and (f) on October 3, 2015, and 
that consummation of the transaction occurs on October 31, 2015. The 
amendments of the TILA-RESPA Final Rule, including the requirements to 
provide the Loan Estimate and Closing Disclosure under Sec.  1026.19(e) 
and (f), apply to the transaction. The creditor would also be required 
to provide the special information booklet under Sec.  1026.19(g) of 
the TILA-RESPA Final Rule, as applicable. Assume a creditor receives an 
application, as defined under Sec.  1026.2(a)(3) of the TILA-RESPA 
Final Rule, for a transaction subject to Sec.  1026.19(e) and (f) on 
September 30, 2015, and that consummation of the transaction occurs on 
October 30, 2015. The amendments of the TILA-RESPA Final Rule, 
including the requirements to provide the Loan Estimate and Closing 
Disclosure under Sec.  1026.19(e) and (f), do not apply to the 
transaction, except that the provisions of Sec.  1026.19(e)(2), 
specifically Sec.  1026.19(e)(2)(i), (e)(2)(ii), and (e)(2)(iii), do 
apply to the transaction beginning on October 3, 2015, because they 
become effective on October 3, 2015, without respect to whether an 
application, as defined under Sec.  1026.2(a)(3) of the TILA-RESPA 
Final Rule, has been received by the creditor or mortgage broker on 
that date. The creditor does not provide the Closing Disclosure so that 
it is received by the consumer at least three business days before 
consummation; instead, the creditor and the settlement agent provide 
the disclosures under Sec.  1026.19(a)(2)(ii) and Sec.  1024.8, as 
applicable, under the Truth in Lending Act and the Real Estate 
Settlement Procedures Act, respectively. The requirement to provide the 
special information booklet under Sec.  1026.19(g) of the TILA-RESPA 
Final Rule would also not apply to the transaction. But the creditor 
would provide the special information booklet under Sec.  1024.6, as 
applicable.
    ii. Predisclosure written estimates. Assume a creditor receives a 
request from a consumer for a written estimate of terms or costs 
specific to the consumer on October 3, 2015, before the consumer 
submits an application to the creditor, and thus before the consumer 
has received the disclosures required under Sec.  1026.19(e)(1)(i). The 
creditor, if it provides such written estimate to the consumer, must 
comply with the requirements of Sec.  1026.19(e)(2)(ii) and provide the 
required statement on the written estimate, even though the creditor 
has not received an application for a transaction subject to Sec.  
1026.19(e) and (f) on that date.
    iii. Request for preemption determination. Assume a creditor 
submits a request to the Bureau under Sec.  1026.28(a)(1) for a 
determination of whether a State law is inconsistent with the 
disclosure requirements of the TILA-RESPA Final Rule on October 3, 
2015. Because the amendments to Sec.  1026.28(a)(1) are effective on 
that date and do not depend on whether the creditor has received an 
application as defined under Sec.  1026.2(a)(3) of the TILA-RESPA Final 
Rule, Sec.  1026.28(a)(1), as amended by the TILA-RESPA Final Rule, is 
applicable to the request on that date and the Bureau would make a 
determination based on the amendments of the TILA-RESPA Final Rule, 
including, for example, the requirements of Sec.  1026.37.

Subpart C--Closed End Credit

* * * * *
Section 1026.19--Certain Mortgage and Variable-Rate Transactions
* * * * *
    19(g)(2) Permissible changes.
* * * * *
    3. Permissible changes to title of booklets in use before October 
3, 2015. Section 1026.19(g)(2)(iv) provides that the title appearing on 
the cover of the booklet shall not be changed. Comment 19(g)(1)-1 
states that the Bureau may, from time to time, issue revised or 
alternative versions of the special information booklet that address 
transactions subject to Sec.  1026.19(g) by publishing a notice in the 
Federal Register. Until the Bureau issues a version of the special 
information booklet relating to the Loan Estimate and Closing 
Disclosure under Sec. Sec.  1026.37 and 1026.38, for applications that 
are received on or after October 3, 2015, a creditor may change the 
title appearing on the cover of the version of the special information 
booklet in use before October 3, 2015, provided the words ``settlement 
costs'' are used in the title. See comment 1(d)(5)-1 for guidance 
regarding compliance with Sec.  1026.19(g) for applications received on 
or after October 3, 2015.
* * * * *

    Dated: July 20, 2015.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2015-18239 Filed 7-22-15; 11:15 am]
 BILLING CODE 4810-AM-P