Finalized TRID Rule Applies to All Residential Deals Involving Cooperatives

In July, the CFPB finalized a uniform rule regarding the application of the TILA-RESPA Integrated Disclosure (TRID) requirements for cooperative units. 

Under the existing rule, coverage of cooperative units depended on whether cooperatives were classified as real property under state law. Cooperatives are sometimes treated as personal property under state law and sometimes as real property. Because state law sometimes treats cooperatives differently for different purposes, there was uncertainty and inconsistency in the manner in which lenders would classify these transactions. This could lead to potential liability. The final rule extends coverage to include all cooperative units without regard to the state level designation of cooperatives. In the final rule, the bureau reiterated that TRID does not apply to loans for business, commercial or agricultural purposes.

The official effective date of the amendment is Oct. 10, 2017, but the CFPB said there is an optional compliance period in effect until Oct. 1, 2018.