Trid Improvement Act of 2017
Floor Speech
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Mr. HILL. Madam Speaker, I rise in support of my bill, H.R. 3978, the TRID Improvement Act.
I want to focus my comments on the actual improvements to the Truth in Lending and RESPA form, TILA-RESPA, which is now referred to as TRID.
Back in 2010, when Dodd-Frank was being considered, one of the goals that then-White House staffer Elizabeth Warren, now Senator Elizabeth Warren, had was: Well, we are going to make this a win for both banks and consumers. One of the things we are going to do is we are going to make forms simpler and consumer disclosure better. America's exhibit A today is the TILA-RESPA form.
TILA was about truth in lending, and let's make sure the interest rate you are going to pay on your mortgage is calculated right, it is accurate. And RESPA, the Real Estate Settlement Act, said that whatever you were paying in extras, such as title insurance, was disclosed accurately.
Well, we now flash forward a number of years.
Back in 2013, the CFPB finalized this new, combined rule, the TRID rule: know before you owe. It should have been called: know before you confuse.
This rule, finalized in 2013, was still subject to delay due to errors that the CFPB made, and it finally got put in place back in 2015.
There was $1.5 billion in software compliance costs for banks to try to merge this form that is supposed to be so simple and so easy for consumers. The CFPB offered no concrete guidance about it. So this House came together and over 300 Members of this House voted to direct the CFPB to improve this rule; that it was not a success story.
So, in fact, in April 2016, the CFPB decided to open the rulemaking for TILA-RESPA and try to find some clarifying and amending procedures that would make it more clear.
Well, as you can hear, it is a massive, complex rule that is expensive. The American Bankers Association said if there was one thing to fix in consumer compliance, it would be TILA-RESPA; the TRID. It wouldn't be the qualified mortgage definition. It wouldn't be all the capital rules embedded in Dodd-Frank. It would be this rule.
When I have been at home in my district, I have heard about it countless times from mortgage bankers and community bankers.
So we are still not there, which is why we are here today, Madam Speaker. And that is, this bill does one simple thing, which says: if you buy a title insurance policy, in the majority of States, the CFPB rule is not accurate.
You can see here that the rule for Arkansas on a $200,000 sales price house says that the consumer should pay $382.50 after this complex formula when, in reality, they are really paying either $525 or the actual charge of $35. So it is not an improvement.
In these States, the CFPB is not allowing for the calculation of a discounted rate, known as a simultaneous issue, which is a rate title insurance companies provide to consumers when they purchase both the lender's and owner's title policy simultaneously.
Madam Speaker, this bill offers clarity and actually takes a complex rule and makes this part of it simpler so our consumers actually will see on the closing statement what the cost of the title insurance is. It will be transparent.
There are many other challenges with this rule, and we have talked about them in our committee. Today, we are only debating and discussing one small one.
But I urge my colleagues on both sides of the aisle--when this bill came out of our committee--bipartisan--this is a bill that Members of Congress have heard from across this country and all 50 States from community bankers, mortgage bankers of all sizes who are trying to provide an accurate, fast closing for our most important thing we do as a family, and that is to decide to buy a home.
I thank the chairman of the full committee for yielding. I urge my colleagues to support this full package of bipartisan bills through regular order, through our committee, and that are presented here to improve our economy, improve the balance in our regulatory system, and help make credit more accessible for consumers at better prices.
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