The Treasury Department’s report on reforming financial regulation in the U.S. blames rules ushered in under the Dodd-Frank Act – and promulgated by the CFPB – for tight credit conditions in the mortgage market. “While Dodd-Frank and the ATR/QM [ability to repay/qualified mortgage] rule were not intended to eliminate markets for loans that did not meet the QM standards, the reality is that the vast majority of lenders remain unwilling to make loans that do not meet those standards, eliminating access to mortgages for many creditworthy borrowers,” Treasury wrote in the 142-page report. (At best, $3 billion to $4 billion in nonprime/non-QM mortgages might be originated this year out of total industrywide originations of $1.5 trillion.) The administration took aim at Appendix ...
The American Bankers Association recently detailed a handful of major concerns it continues to have with the approach federal regulators take toward fair lending. The first such concern it listed in a new white paper sent to the Treasury Department is the expanded use of the disparate-impact concept. “Federal agencies responsible for ensuring compliance with national fair lending laws have in the last few years aggressively applied a controversial legal theory, disparate impact, to brand banks with violations of fair lending rules,” said the ABA. Under the disparate-impact theory, regulators rely heavily, sometimes solely, on statistical sketches to justify lawsuits or other enforcement actions, it added. “In doing so, since June 2015 they have largely ignored the analytical framework established ...
RSS