Newly proposed legislation by U.S. Reps. Tom Emmer (R-MN) and Randy Hultgren (R-IL) would give America’s Main Street banks and credit unions more time to comply with the Consumer Financial Protection Bureau’s (CFPB) stringent mortgage loan data requirements.
The Home Mortgage Reporting Relief Act of 2017, H.R. 4648, introduced by the congressmen on Dec. 18, would give financial institutions a one-year safe harbor from having to comply with the data collection and reporting requirements issued under the CFPB’s October 2015 and September 2017 amendments to the Home Mortgage Disclosure Act’s Regulation C. The revised Regulation C final rule is set to go into effect on Jan. 1, 2018.
H.R. 4648 also would restrict the CFPB’s ability to make any of the newly collected and reported data publicly available, according to Emmer and Hultgren, who both serve on the House Financial Services Committee.
“I consistently hear from community banks and credit unions throughout the Sixth District that the CFPB’s new rules will make it harder for them to do what they do best: help Minnesota families achieve the American dream,” said Emmer referring to his home state.
“While we work to blunt the impact of these burdensome regulations,” Emmer added, the bill would provide them with additional time to comply with the new rule and “focus on getting Americans into new homes in a timely manner rather than figuring out how to navigate through more red tape.”
Hultgren said the new Home Mortgage Disclosure Act requirements “again demonstrate that the CFPB does not understand our community banks and credit unions.”
“Just as one burdensome mortgage rule is finalized, our community financial institutions have to deal with a new rule,” he said.
H.R. 4648 also will give community banks and credit unions some breathing room “so they can refocus on meeting the financial needs of families and small businesses in Illinois,” Hultgren added.
Should the revised Regulation C go into effect as stated, banks and credit unions must collect 48 additional unique data fields on any mortgage loan they originate and report the data to the CFPB.
This change more than doubles the number of data fields currently required to be collected and will result in small community mortgage lenders having to compile a total of 110 data points to process a mortgage, according to Emmer’s office, which said community financial institutions could be forced to divert resources to deal with the additional bureaucratic red tape, and increase costs and time to process a mortgage for home buyers.
And among the 48 new data fields, some could determine a borrower’s identity and enable competitors to reconfigure a lender’s pricing models, harming the lender’s competitiveness, according to a U.S. Treasury Department report from June.
H.R. 4648 has been referred to the House Financial Services Committee.