The American Bankers Association recently joined four other associations to express support for proposed reforms to the Consumer Financial Protection Bureau’s regulations of the mortgage industry.
In March, President Trump issued an executive order directing the CFPB to implement a series of changes in how it enforces the Truth in Lending Act and regulates mortgage lending and servicing. In a joint letter to the bureau, the associations said they fully support efforts to modernize Dodd-Frank Act requirements “that have increased origination and servicing costs without providing commensurate consumer benefit.” However, they recommended that the bureau first finalize pending rulemakings before advancing more targeted proposals.
The associations suggested the CFPB modernize Regulation Z to allow loan originators to lower their compensation, reform the requirements for what lenders must disclose to borrowers to reduce operational complexity and regulatory uncertainty, and update Home Mortgage Disclosure Act reporting thresholds to better align with the executive order’s focus on community and smaller banks and credit unions.
“Well-crafted servicing regulations will go a long way in eliminating costs and barriers that limit a servicer’s ability to offer timely and streamlined loss mitigation options to borrowers facing financial hardship,” they said.
