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18 | TH E M R EP O RT FEATURE W ith the two-year anniversary of the TILA/RESPA Integrated Disclo - sure rule (known informally as TRID) implementation happen- ing this month, it's a good time to step back and take a look at its impact on the mortgage insurance industry and the larger mortgage space. Though it initially met with some resis - tance, TRID will likely remain as part of a core set of protec- tions for borrowers, along with the qualified mortgage rule, which ensures borrowers aren't put into loan products that they don't have a verified ability to repay. The industry has also seen improvements from the insurance side, as government- sponsored enterprises (GSEs) have implemented a more robust framework for eligible insurers, and state insurance depart - ments are considering a uniform update to state laws that are applicable to MI companies. With this strong framework in place, the mortgage industry can maintain strong ethics, pro- consumer practices, and greater innovation and transparency. Where It All Began T RID, of course, was born in a particular context of financial crisis and regulatory response. Deregulation during the 1990s and early 2000s, like the abolishment of the Glass- Steagall restrictions on banks affiliating with securities firms, was arguably a contributing factor in creating the financial crisis. The financial crisis, in turn, led to the passage of the Dodd-Frank Act (Dodd-Frank), which included substantial new regulatory requirements de- signed to prevent a similar crisis from occurring in the future. Dodd-Frank also established the Consumer Financial Protec- tion Bureau (CFPB), the new regulator on the block, which was structured as an indepen- dent agency and not subject to congressional appropriations. Compliance costs associated with meeting TRID's very pre- cise requirements increased, as did resulting origination costs. The initial enforcement posture of the CFBP was aggressive, making lenders, originators, investors, and other market participants unwilling to take on compliance risk. While the pendulum may have swung too far, not all provisions of Dodd-Frank have had a nega - tive result. TRID, for example, was designed to empower bor- rowers with clear information, and recent surveys show that con- sumer satisfaction has increased. Implementation was bumpy, but it also drove innovation and streamlined processes. Today, the regulatory framework seems to be moderating a bit, with a presiden - tial executive order aimed at re- ducing regulation and controlling regulatory costs. The authority of the CFPB is being challenged in court in the PHH case, and in addition the CFPB seems to be more forthcoming with publishing guidance to clarify uncertainty on the interpretation of TRID that has existed for the past two years, suggesting that we may lose some of the compliance frustrations of recent years while keeping the advantages. A Bumpy Start T RID was designed with the underlying goal of empow- ering borrowers with clear information to make informed choices on getting a mortgage. This works in part by requiring standardized disclosures, known as the Loan Estimate and the Closing Disclosure. TRID's pre - cise requirements are intended to allow borrowers to compare the cost of the mortgage transac- tion offered from lenders and originators. TRID's initial impact was not entirely positive. At the outset, it slowed turnaround times for the entire process. There was a lack of clarity around what exactly the rule required of different parties, and the CFPB was slow to pub - lish clarifying guidance, which led some to question the rule's value. With time, however, many of the initial questions and uncertainties have been resolved and TRID has led to significant beneficial changes. Inspiration Leads to Innovation A s processes have become more streamlined and TRID has been incorporated into day-to-day business, inno- What TRID Did: A Mortgage Insurer's Perspective Since its advent, the ripple effects of TRID have been felt with the GSEs implementing a more robust framework for eligible insurers, and state insurance departments are considering a uniform update to state laws that are applicable to MI companies. By Sara Millard