*The views expressed are my own, are not legal advice, and are intended to encourage professional discussion regarding the CFPB’s Request for Information.
Modernizing TRID or Repeating History?
Every generation of compliance professionals inherits regulations that feel burdensome. Some burdens deserve to be eliminated. Others exist because history taught us why they were needed. Looking back, I believe TRID accomplished something that isn’t discussed often enough. It didn’t simply change disclosure forms.
Operations changed because governance changed. That’s the perspective I hope readers will consider as the industry evaluates what comes next.
As I read the CFPB’s recent Request for Information (RFI) seeking comment on potential changes to the TRID Rule, I found myself asking one question:
Are we modernizing TRID—or are we beginning to forget why it was created?
It is understandable that many professionals today view TRID through the lens of operational burden. For many, that has been their only experience. But for those who worked before TRID, the discussion often begins somewhere different—not with the work the rule created, but with the problems it was intended to solve.
Many mortgage professionals entered the industry after TRID became effective in 2015. They didn’t experience the Good Faith Estimate (GFE) and HUD-1 environment, where estimates often changed significantly before closing and consumers struggled to compare loan costs. As a result, it’s easy to view TRID primarily as administrative work rather than as a response to very real industry challenges.
When I read the RFI, my first reaction wasn’t whether the proposals were good or bad.
My first reaction was this:
Have we spent enough time remembering why TRID was created in the first place?
I’ve worked in Fair Lending and mortgage compliance since before TRID became effective. I’ve reviewed mortgage programs, evaluated pricing practices, conducted Fair Lending risk assessments, investigated consumer complaints, and helped financial institutions strengthen their compliance programs.
Because of that experience, I don’t think of TRID as simply a disclosure regulation. I think of TRID as one of the most significant governance changes the mortgage industry has experienced. Governance isn’t about creating more policies or adding unnecessary approvals. Good governance creates consistency. It reduces unnecessary discretion, establishes accountability, documents decision-making, and helps ensure consumers with similar circumstances receive similar treatment. Those are principles that support compliance, strengthen Fair Lending programs, and ultimately build trust in the mortgage process.
Perhaps that’s the lens through which we should evaluate where it goes next.
The Good:
- Construction Lending Finally Gets the Attention It Deserves
If there is one area where modernization is overdue, it’s construction lending.
Construction loans have never fit comfortably within the existing TRID framework. Interest rates may change during construction. Draw schedules evolve. Settlement costs change throughout the project. Permanent financing often isn’t finalized when the initial disclosures are provided.
Trying to force these products into disclosure forms designed for traditional mortgage loans has often resulted in disclosures that satisfy regulatory requirements while leaving consumers with more questions than answers.
Providing construction-specific guidance or alternative disclosures could actually improve consumer understanding while reducing operational challenges.
To me, that’s modernization. Not less consumer protection. Better consumer protection.
- Modernizing Electronic Disclosures
The CFPB is also seeking feedback regarding electronic disclosures and signatures.
Mortgage lending has become increasingly digital, yet portions of TRID still reflect assumptions from a paper-based world.
Providing additional clarity in this area seems like a logical evolution that benefits both consumers and lenders.
The Questions We Should Be Asking:
- What should we be thinking about?
One of the more interesting concepts within the RFI is replacing certain timing requirements with a more materiality-based approach.
From an operational perspective, I understand why lenders support this idea.
- Fewer redisclosures.
- Fewer delayed closings.
- Lower compliance costs.
Those are legitimate concerns. But it also raises another question. Who decides what is material?
Today, many TRID requirements are objective.
- Was the disclosure delivered within the required timeframe?
- Did the fee exceed the applicable tolerance?
- Was there a documented changed circumstance?
Those questions generally have objective answers.
A materiality-based framework changes the conversation. We now need to think about:
- Does greater flexibility introduce greater discretion?
- If timing requirements become more subjective, how will consistency be maintained?
- If fee tolerances become more flexible, what governance controls replace them?
- Could operational efficiencies create unintended Fair Lending or UDAAP risks?
- Are there governance benefits within TRID that we don’t fully appreciate because they’ve become part of everyday operations?
Instead of asking whether a requirement was met, we begin asking whether someone believed the change was significant enough to warrant additional disclosures.
That doesn’t automatically make the process worse.
It does introduce more judgment.
Whenever judgment increases, consistency becomes a more important governance challenge. It introduces additional governance challenges and, potentially, increased Fair Lending and UDAAP risk.
- Relaxing Fee Accuracy Standards
The CFPB is also asking whether existing fee tolerances should be modified.
Again, I understand why the discussion is occurring.
Providing highly accurate fee estimates early in the mortgage process requires significant coordination among lenders, settlement agents, and third-party providers.
But fee tolerances were never simply operational requirements.
They encouraged lenders to improve the accuracy of early disclosures and provided consumers with greater confidence that the numbers presented at application would reasonably reflect what they could expect at closing.
If those standards become more flexible, what governance controls should replace them?
That may be one of the most important questions raised by this RFI.
The Opportunities:
- How do we modernize without repeating history?
One observation continues to stay with me as I think about these proposals.
For those who didn’t work under the previous framework, borrowers received a Good Faith Estimate (GFE) early in the process and a HUD-1 Settlement Statement at closing. While those forms served the industry for many years, they often resulted in last-minute surprises, inconsistent estimates, and made it more difficult for consumers to compare loan costs.
As a result, it’s easy to view TRID primarily as administrative work. Those of us who worked through the transition remember something different.
TRID wasn’t created simply to replace forms.
It was created because the existing framework wasn’t consistently providing transparent, timely, and reliable information to consumers. Every governance control has a cost. The question isn’t whether a control creates work. The question is whether the value of that control still exceeds its cost.
- Did TRID Do More Than Improve Disclosures?
This question may be worth asking.
Did TRID actually institutionalize governance? Think about what lenders built because of TRID.
- Pricing controls.
- Fee governance.
- Documented changed circumstances.
- Approval processes.
- Standardized disclosures.
- Timing controls.
- Communication between lending, operations, compliance, and settlement providers.
- Audit trails.
Operations Changed Because Governance Changed
None of those improvements happened by accident. As someone who has spent much of the last decade reviewing Fair Lending programs, I often wonder whether one of TRID’s greatest accomplishments wasn’t simply improving disclosures.
- Perhaps it was reducing unnecessary discretion.
- Perhaps it was encouraging consistency.
- Perhaps it was strengthening governance in ways that benefited both consumers and lenders.
Those weren’t necessarily the headlines when TRID was implemented. But they’ve become part of how many institutions manage mortgage risk today.
Every generation of compliance professionals inherits regulations that feel burdensome. Sometimes those burdens truly no longer serve a meaningful purpose. Other times, they represent governance controls that have quietly improved consistency, transparency, and accountability over time.
The opportunity before us isn’t simply to reduce regulatory burden. It’s to thoughtfully evaluate which requirements can be modernized while preserving the governance framework that has strengthened mortgage lending over the past decade.
If we approach this conversation with both history and innovation in mind, we have the opportunity to create a TRID framework that is more efficient, more understandable, and equally effective at protecting both consumers and lenders.
Good Governance Often Feels Burdensome
One lesson I’ve learned throughout my compliance career is that good governance often feels burdensome until you remember why the control was implemented in the first place.
- If timing requirements become more flexible…
- If fee tolerances become less objective…
- If redisclosure decisions rely more heavily on lender judgment…
Have we reduced unnecessary burden? Or have we simply shifted risk from operational compliance to governance? I don’t know the answer.
But I think it’s a question worth asking.
My Perspective
- Do I believe TRID should evolve?
- Absolutely.
- Construction lending deserves thoughtful modernization.
- Electronic disclosures should continue to evolve.
- There are undoubtedly portions of the rule that can be simplified without diminishing consumer protections.
At the same time, I believe it’s worth remembering that TRID accomplished more than improving disclosure forms.
- It changed how institutions govern mortgage lending.
- It encouraged stronger controls.
- It promoted greater consistency.
- It improved documentation.
- It reduced unnecessary discretion.
Those governance improvements naturally influenced operations, pricing, Fair Lending oversight, audits, examinations, and ultimately the consumer experience.
TRID helped because it encouraged:
- standardized fee practices
- documented changed circumstances
- pricing controls
- approval hierarchies
- fewer last-minute discretionary decisions
Those are governance improvements. Not Fair Lending requirements. Yet they naturally strengthened Fair Lending oversight.
As we consider the future of TRID, perhaps the conversation shouldn’t simply be about reducing regulatory burden. Perhaps it should also be about understanding which requirements have quietly become the foundation of good governance. For many, that has been their only experience. But for those who worked before TRID, the discussion often begins somewhere different, not with the work the rule created, but with the problems it was intended to solve.
The mortgage industry doesn’t benefit from unnecessary regulation. It also doesn’t benefit from forgetting why certain regulations were created in the first place.
As the industry considers the CFPB’s Request for Information, I’d encourage everyone to ask a few questions.
- Which TRID requirements create operational burden without adding meaningful value?
- Which requirements have become governance controls that improve consistency?
- If objective timing and accuracy standards become more flexible, what controls replace them?
- Are we modernizing mortgage lending…
- Or are we at risk of repeating history?
Whether you’re a lender, compliance officer, examiner, auditor, regulator, attorney, or vendor, I’d encourage you to read the RFI for yourself before the August 10 comment deadline.
- Don’t simply ask which requirements create work.
- Ask what governance those requirements created.
- Then ask yourself whether there’s a better way to accomplish the same objective.
That’s the conversation I hope we have over the next 30 days.
I’d love to hear your thoughts. The CFPB has opened the door for this discussion.
Now it’s our opportunity; as compliance professionals, lenders, auditors, attorneys, and regulators, to make sure history informs whatever comes next. Final thought, History shouldn’t prevent innovation, but innovation should always remember history!
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I’m digging a little deeper into this topic in a few weeks and would love to have you join me.
Modernizing TRID: Understanding the CFPB’s Proposed Direction is taking place August 26th. Whether you support modernization, targeted reform, or preserving the existing framework, it is designed to encourage thoughtful discussion and help institutions prepare for what may come next.
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