As Congress considers changes to the Dodd-Frank Act and other regulatory reforms, the Structured Finance Industry Group weighed in with a white paper detailing various regulatory reforms sought by participants in the MBS and ABS markets. One of the top priorities for the trade group is the so-called Regulation AB2, which sets loan-level disclosure requirements for securities. The Securities and Exchange Commission set...

Rep. Jeb Hensarling, R-TX, introduced a revised version of the Financial CHOICE Act this week. The bill would impact many regulatory reforms included in the Dodd-Frank Act, which was signed into law in 2010. Perhaps most significant for the non-agency market, the CHOICE Act would apply qualified-mortgage protections to home loans held in portfolio. Banks offering mortgages with interest-only features, balloon payments or high debt-to-income ratios that don’t currently ...

Late last week, House Financial Services Committee Chairman Jeb Hensarling, R-TX, released a detailed discussion draft of a revised version of his Financial CHOICE Act that would eviscerate the Consumer Financial Protection Bureau and make a number of other changes to the Dodd-Frank Act and a host of its mortgage-related regulations. Title VII of the draft, recently dubbed CHOICE Act 2.0, would dismantle the parts of the CFPB that the lending industry and other critics have found to be most problematic: its rulemaking, supervisory and enforcement authority, including unfair, deceptive or abusive acts or practices. The previous version of the bill would have retained...

House Financial Services Committee Chairman Jeb Hensarling, R-TX, last week released a detailed discussion draft of his pending revised Financial CHOICE Act that would extensively revise the mortgage regulatory landscape. Issues of interest to the mortgage industry include manufactured housing, the definition of points and fees, a qualified-mortgage safe harbor for loans held in portfolio, regulatory relief for community banks, transitional licensing for loan originators, Home Mortgage Disclosure Act records maintenance and disclosure requirements, and HMDA data privacy. There would be some drastic changes made to the CFPB, too, most notably the elimination of its rulemaking, supervisory and enforcement authority and its market monitoring functions and turning it into a law enforcement agency. Other CFPB-related changes include: Changing the name ...

Most of the discussion about lender relief from the compliance burdens under the Dodd-Frank Act has revolved around the Financial CHOICE Act sponsored by House Financial Services Committee Chairman Jeb Hensarling, R-TX. But the wheels are starting to move in the Senate Banking, Housing and Urban Affairs Committee, where Chairman Mike Crapo, R-ID, has begun receiving input from industry trade groups about the kind of changes they would like to see. The lion’s share of the industry’s concerns have to do with the mortgage rules promulgated by the Consumer Financial Protection Bureau, whether it’s the integrated disclosure rule, the ability-to-repay rule or the penchant the bureau seems to have for bypassing the public rulemaking process through the use of consent orders. The Mortgage Bankers Association urged...

During a conference call last week with members of the news media, Massachusetts Democrat Barney Frank, the one-time chairman of the House Financial Services Committee, defended the CFPB and criticized congressional Republicans for their attack on the agency, accusing them of hypocrisy on multiple fronts. “I thought Republicans were concerned about excessive power in the executive branch, that they want to defend their congressional prerogative,” said Frank. But during the debate on the Dodd-Frank Act, Congress decided quite consciously that we would have an independent, single director, independent in the sense that the president could not fire that person at will,” he noted. “That was a congressional restriction on presidential appointment power, no question about it.” But now, apparently their ...

Community lending representatives met with Trump administration officials last week to push a package of pro-growth, regulatory relief proposals, including a number of changes to the mortgage rules promulgated by the CFPB. The meeting was held with Treasury Department officials under President Donald Trump’s executive order directing the Treasury to review existing laws, treaties, regulations, guidance, reporting and recordkeeping to determine if they promote or inhibit federal regulation of the U.S. financial system as per Trump’s core principles outlined in Executive Order 13772. Meeting with the Trump administration officials were a handful of CEOs of bank that are members of the Independent Community Bankers of America.Among the proposed changes the trade group advocated was a more expansive qualified mortgage ...

With House Republicans set to resume work on legislation to overhaul provisions in the Dodd-Frank Act, mortgage lenders testified at a hearing this week calling for changes to standards for qualified mortgages. “As a result of some of the constraints in the QM definition, many borrowers who should qualify for a QM are unable to access safe, sustainable and affordable mortgage credit,” said David Motley, president of Colonial Companies and chairman-elect of the Mortgage Bankers Association. He made the comments at a hearing by the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. The MBA urged...

The new political landscape in Washington, DC, has intersected with the judicial movement on the PHH Corp. v. CFPB case to give the mortgage industry some hope that the bureau can be scaled back. But the task is complicated by the fact that the new administration is headed by a political novice, and by the fact that the industry itself is not particularly unified about what kind of changes should be made. During a recent webinar sponsored by Inside Mortgage Finance, three top industry attorneys discussed some of the prospects for change on three separate fronts of the federal government: the executive branch, the legislative branch and the judicial branch. If there’s a single theme or take-away from the event,...

In a recent letter to CFPB Director Richard Cordray, Rep. Emanuel Cleaver, D-MO, called upon the bureau to address potential abuses by financial technology companies that may be engaged in predatory small-business lending. In so doing, he asked that the CFPB “investigate whether fintech companies engaged in small business lending are complying with all anti-discrimination laws, including the Equal Credit Opportunity Act.” The congressman’s letter noted that fintech lending companies, also known as alternative small-business lenders, are a fast-growing industry offering a new wave of innovation, but they also pose many risks, he added. “Over the past decade, there’s been a very large increase of Silicon Valley start-ups and technology companies that are functioning like banks,” Cleaver said. “The CFPB ...