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New Rule for Using Closing Disclosure When Resetting Tolerances

On April 26, 2018, the CFPB issued a final rule addressing utilization of a Closing Disclosure to reset tolerances under the TILA‐RESPA Integrated Disclosure Rule (TRID).

Under the current regulation, a creditor may only use a Closing Disclosure to reset tolerances if there are fewer than four business days between the time the creditor is required to provide the CD reflecting the revised estimate and consummation.

The four‐day limit has now been removed.

If a changed circumstance or other triggering event has occurred, the rule now permits a creditor to reset tolerances with either an initial or corrected Closing Disclosure, regardless of the number of days between consummation and the date the Closing Disclosure reflecting the revised estimate is required to be provided.

Although the four‐day limit has been removed, all other timing requirements remain in place as follows:

  • The creditor must provide the Closing Disclosure reflecting the revised estimate at or before consummation and within three business days of receiving information sufficient to establish that a changed circumstance or other triggering event has occurred;
  • The consumer must receive an initial Closing Disclosure at least three business days prior to consummation; and
  • A new three‐day waiting period is required for a revised Closing Disclosure if the APR becomes inaccurate, a prepayment penalty is added, or the loan product changes from the previously disclosed loan product.

If you have questions regarding this Special Release, contact TCA at [email protected]

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