Obtaining a copy of the new “Closing Disclosure” from your client for your files is now allowed by CFPB?
On July 7, 2017, the Consumer Financial Protection Bureau (CFPB) released the final rule amending the “Know Before You Owe” (KBYO or TRID) mortgage disclosure rule. As advocated for by NAR, the final rule clarifies the ability to share the Closing Disclosure (CD) with third parties - a victory for real estate professionals nationwide.
As outlined in the 2016 proposed rule, the final rule highlights an existing exception within the Gramm-Leach-Bliley Act (GLBA) and implementing Regulation P that allows lenders to share the CD with third parties (sections 502(e)(1) and 509(7)(A)). The CFPB recognizes the CD as a “record of the transaction,” which is “informative to real estate agents and others representing both the consumer credit and real estate portions of residential real estate sales transactions.” The CFPB notes that CD sharing is permissible to the extent it is consistent with GLBA and Regulation P and is not barred by applicable State law.
The final rule was published in the Federal Register on August 11, making it effective on October 10, 2017. Mandatory compliance is required by October 1, 2018.
Would this be considered personal information that falls under the data security regulations?
It is likely that the CD would be considered personal information under Massachusetts law and fall under
Written Information Security Plan (WISP)
regulations (see previous The Informer
article regarding data security regulations). This is because the CD asks for the “loan ID number” which falls within the definition of personal information if in fact it is also the loan number for the mortgage. Care should be taken to ensure that all copies of the CD are reasonably secure and protected.
To find out more about this topic, visit NAR’s
CFPB webpage for information and resources.