On July 29, 2016, the Consumer Financial Protection Bureau (CFPB) issued its latest proposal for amendments and commentary to the TRID Rule, which mandated the new integrated disclosures in residential closings. As required by the process for federal rulemaking, the July 29 publication is a proposal, not a final rule. This process requires the CFPB to publish the proposal and request comments from the public. After the comment period, which ends on October 18, 2016, the CFPB will consider the comments and then issue the final amendments, which may or may not be the same as the proposal. One topic the new proposal addresses is “the sharing of disclosures with sellers and various other parties including real estate agents.” There is a separate federal law that prohibits a lender or settlement agent from disclosing a customer’s nonpublic information. Therefore, since TRID became effective, lenders and settlement agents have not provided the Closing Disclosure to any third parties out of privacy concerns. Not surprisingly the CFPB “has been asked repeatedly” whether third parties, such as real estate agents, can receive a copy of the Closing Disclosure. In the July 29 proposal, the CFPB expressed its “understanding . . . that it is usual, appropriate and accepted” to deliver the Closing Disclosure to real estate agents as a record of the transaction, and that this would fall under an exception to the privacy law.

This announcement has been met with cheers from the National Association of Realtors and other organizations. Does this mean that real estate agents will suddenly find themselves included in the Closing Disclosure loop beginning next week? Probably not . . . . Although the new proposal indicates that the CFPB is on board with providing the Closing Disclosure to agents, the proposal has no force of law until the final amendments are issued and take effect. Until then, the potential for privacy violations remains, and lenders may well wait until the ink has dried on the final TRID Amendments before authorizing the distribution of the Closing Disclosure to everyone around the closing table. Until lenders give explicit instructions to distribute the Closing Disclosure, settlement agents will be hesitant to do so. For now, real estate agents may need to be patient with the process, but it looks like we are on the right track.