Under TRID 1.0 (78 FR 79730 ), the “Borrower” listed on the top of the Closing Disclosure (“CD”) is the “consumer” and, in rescindable transactions, the “consumer” includes “natural person[s] in whose principal dwelling a security interest is or will be retained or acquired, if that person’s ownership interest in the dwelling is or will be subject to the security interest.” For non-rescindable transactions, “consumer” only means the “natural person to whom consumer credit is offered or extended” and, therefore, non-purchasing entities (“NPEs”) would not be listed on the first page (see 12 CFR §§ 1026.2[a] & 1026.38[a][i] and 12 CFR Pt. 1026, Supp. I, Paragraph 38[a] – 1).
However, under TRID 2.0 (82 FR 37656 ), a new Official Staff Comment was added which states that for purposes of this particular disclosure requirement, “consumer” only means those person to whom credit is offered or extended:
“Section 1026.38(a)(4)(i) requires disclosure of the consumer’s name and mailing address, labeled ‘Borrower.’ For purposes of § 1026.38(a)(4)(i), the term ‘consumer’ is limited to persons to whom the credit is offered or extended. For guidance on how to disclose multiple consumers, see comment 38(a)(4) – 1.” (12 CFR Pt. 1026, Supp. I, Paragraph 38[a] – 4; 82 FR 37785 – 37786 )
The CFPB states that “by disclosing the name and mailing address only of persons to whom the credit is offered or extended pursuant to § 1026.38(a)(4)(i), the Bureau concludes that, as finalized, comment 38(a)(4) – 4 yields a disclosure that is more consistent with the label ‘Borrower’ and presents less potential for consumer confusion. As finalized, comment 38(a)(4) – 4 is also consistent with current § 1026.37(a)(5), which limits disclosure of ‘Applicants’ on the Loan Estimate to only include the name and mailing address of consumers applying for the credit.” (82 FR 37723 )
Please note that a copy of the CD MUST still be provided to NPEs if they are considered a “consumer” under various parts of Regulation Z, most notably 12 CFR Pt. 1026, Supp. I, Paragraph 17(d) – 2. However, under TRID 2.0, creditors may only disclose the names of the natural persons “to whom consumer credit is offered or extended” under the label “Borrower” on the first page of the CD, thus excluding NPEs.
To support this change, when new “TRID 2.0 Indicator” (FI 118689) is set to “Yes”, the names of any NPEs will not appear in the “Borrower” section at the top of the first page of our Closing Disclosure (Cx18566) and Spanish Closing Disclosure (Cx18991). The NPE names will also not appear in the addendum to the CD. This will remain true even if clients select “Yes” for “Always Print NPE Names/Signatures on Closing Disclosure (FI 102041), as long as FI 118689 is set to “Yes” (since TRID 2.0 does not permit creditors the option of disclosing NPEs under the “Borrower” label).
Signature lines will still appear for NPEs as currently configured, since creditors may still need to provide NPEs with copies of the CD and may still wish for NPEs to sign receipt of this document.
These changes will take effect on April 4, 2018. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.