Last week, a newly released memo showed some of the major changes to the country’s financial regulatory system that could be put in place if the Financial CHOICE Act is passed.
Included among those proposed changes are significant alterations to the structure and mission of the Consumer Financial Protection Bureau.
But the House isn’t the only place where regulatory reform is under consideration.
Late last week, both the Mortgage Bankers Association and the Credit Union National Association sent letters to the leadership of the Senate Banking Committee.
The purpose of the letters is to answer a request from Senate Banking Committee Chairman Sen. Mike Crapo, R-Idaho, and Senate Banking Committee Ranking Member Sen. Sherrod Brown, D-Ohio, for a “proposal for economic growth.”
Each group’s letter touches on a number of regulatory reform measures that would affect the mortgage business, including several CFPB rules and procedures.
“The current regulatory environment has increased costs and forced many responsible mortgage bankers to limit lending. This most often harms low-to-moderate income borrowers, minorities, and first-time homebuyers,” the MBA said in its letter to Crapo and Brown.
“We urge the Committee to do a thorough review of current rules and regulations and make adjustments where necessary in order to balance the need for consumer protection while ensuring access to safe, sustainable mortgage credit,” the MBA continues.
“In this regard, we strongly urge that particular attention be given to simplifying rules, providing greater clarity and certainty, and mitigating supervisory burdens,” the MBA adds. “These goals are particularly important for smaller, community lenders that may not be able to sustain excessive compliance and legal infrastructures.”
One area where the MBA feels regulatory reform is needed is in the way the CFPB operates from an oversight standpoint. From the MBA letter:
The Consumer Financial Protection Bureau’s (CFPB) use of consent decrees and administrative decisions to make changes in the rules, rather than formal rulemaking or published guidance, has created uncertainty in the market and higher costs for consumers. MBA believes the CFPB, when implementing new rules or changing the interpretation of existing rules, should adopt clear “rules of the road” through the issuance of ￼official, written interpretative rules, supervisory guidance and/or compliance bulletins to facilitate regulatory certainty and consistent consumer protections throughout the market.