The Consumer Financial Protection Bureau (CFPB) recently approved an application from the Independent Community Bankers Association (ICBA) for alternative disclosures under the Truth in Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure (TRID) rule for construction-to-permanent loans. This approval is specifically for a Trial Disclosure Program Waiver Template (TDP Waiver Template).
However, it’s important to clarify that TDP Waiver Template, despite its approval, is not currently operative and has no binding effect on the CFPB or individual institutions. The CFPB’s decision to greenlight this application essentially pertains to the use of an alternative disclosure method under TILA/RESPA TRID guidelines for specific construction-to-permanent loans.
The end-goal of this program is to experiment with and inform effective disclosure methodologies that offer real value to consumers. While not yet operative, this recent approval represents a significant step in that direction.
Those working in legal teams of large corporations and law firms, particularly those dealing with banking and finance sectors, should be attuned to these developments in financial regulation. The burgeoning discourse surrounding alternative disclosure methods for loans will have widespread implications not just for banking institutions, but any entity that interacts with the financial services industry.