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16 | TH E M R EP O RT COVER STORY TRID 2.0 even during the course of a transaction. While this can be beneficial, it does complicate matters for some in the industry. For example, secondary market investors may not be able to tell from a loan file which provi- sions the lender implemented at which time. In addition, technol- ogy vendors, such as compliance software vendors, may experience issues with lenders implementing different parts of TRID 2.0 at dif- ferent times. Supervision of the TRID rule also comes into question in light of the TRID 2.0 rule. Based on the preamble of the rule, it ap- pears that the CFPB will apply its "good faith" supervision period only to the TRID 2.0 rule in the near future. But how will this be implemented? The CFPB has stated that its "good faith" period for the current rule will continue only for examinations with re- view periods before October 2016. This is a significant development which means compliance with TRID has become even more important for lenders. Liability, Black Holes and Other Mysteries T he TRID 2.0 rule also does not provide any relaxation of or clarity regarding the TRID rule's liability for violations, or any additional flexibility in curing violations. The CFPB was clear in the rule's preamble that it would not address the "major policy decisions" that have concerned the industry, such as the disclosure of the simultaneous issuance of title insurance, the liability for violations, or the expansion of the available cures. The CFPB specifically stated with respect to the industry's requests to expand the cure provisions under TRID, that it "would not be practicable without substantially undermin- ing incentives for compliance with the rule," and that it "would be extraordinarily complex." Unfortunately, these major issues facing the industry, including the secondary market, go unanswered in TRID 2.0 and are unlikely to be the topic of additional rule- making under the CFPB's current leadership. Further, the CFPB's final rule does not fix the infamous "Black Hole," i.e., the time period in which a creditor cannot use a valid changed circumstance or other reason for revision for toler- ance purposes using the Closing Disclosure (CD). Although the CFPB had proposed to add a new provision that would have allowed creditors to use any cor- rected CDs for tolerance purposes at any time, which would have eliminated the Black Hole, the CFPB stated that it did not intend this result. As a result of public comments to its proposal that supported this unintended result, however, the CFPB issued a new proposed rule to intentionally eliminate the Black Hole. While it is a positive development that the CFPB has proposed a rule specifi - cally dealing with this industry issue, its failure to fix the Black Hole in TRID 2.0 means that the industry will be dealing with this issue for quite some time. And, considering the recent weather events in the U.S., some lenders will most certainly face the Black Hole under the current rule. Comments on the new pro - posed rule are due by October 10. The industry should understand that it is not certain that the CFPB will eliminate the Black Hole. The CFPB raised concerns about consumer harms from allowing creditors to re-baseline the tolerances using the CD. The CFPB raised concerns with creditors providing the CD very early to avoid any timing issues with closing, "passing more costs on to consumers," and "informa- tion overload" from receiving more CDs. It is important for the industry to submit comments on the proposed rule. It would be helpful for the comments to spe- cifically address how consumers may benefit from the elimination of the Black Hole. Private Matters T here have also been ques- tions in the industry regard- ing how privacy laws, including the Gramm-Leach-Bliley Act (GLBA), work with the TRID rule. In particular, the indus- try has questioned whether the consumer's and seller's CDs can be shared with each other, their real estate agents, or other third parties. While the CFPB provided some general guidance in the preamble regarding how the CDs can be shared under the GLBA, it did not provide formal guid- ance in the rule permitting such sharing with real estate agents or other third parties involved in the transaction. This preamble language, while helpful, does not provide complete certainty to the industry. And in another area— the provision of separate CDs to the borrower and seller—the CFPB has also increased the level of uncertainty. The CFPB added commentary to the rule that al- lows lenders and settlement agents to modify the CDs to separate borrower and seller informa- tion in essentially any way they choose, including omitting parts of the forms. This new commen- tary appears to allow flexibility in creating new versions of separate CDs, which may make it harder for the secondary market and oth- ers to analyze whether the format of a separate CD is in compliance. Item by Item T he CFPB also has some confusing language in the preamble regarding the level of itemization required on the Loan Estimate under the "Can Shop For" category of charges and the Written List of Service Providers. In the preamble of TRID 2.0, the CFPB notes that the Written List of Service Providers and the Loan Estimate require the itemization of services required by the credi- tor but then states that this does not include certain "related fees" that are "ancillary" to the required service. The CFPB provides an example of lender's title insur- ance, which it states is a required service that must be disclosed, but that related services such as a title search fee or notary fee are not required to be itemized. But, the CFPB does not state how a creditor should disclose such fees when the creditor knows they will be charged to the consumer, which is frequently the case. It appears from the preamble that the CFPB does not consider such services to be required by the creditor, but the CFPB did not state whether such services should then be disclosed under the "Oth - er" category of "Other Costs" or whether they should be treated as non-required services for tolerance purposes. As a result of this guid- ance, the CFPB has created more confusion than certainty regard- "It is important for the industry to submit comments on the proposed rule, and it would be helpful for the comments to specifically address how consumers may benefit from the elimination of the Black Hole."