WASHINGTON — For the first time in weeks, both chambers of Congress are in session, and they're taking a hard look at regulatory relief efforts.
Possibly as early as Monday night, HB 3211, the Mortgage Choice Act, is expected to be passed by a full vote of the House, according to NAFCU VP-Legislative Affairs Brad Thaler.
The bill addresses CFPB's QM requirement that certain incidental costs of a loan that are paid by the borrower be limited to no more than 3% of the total loan amount. The legislation would exclude insurance held in escrow and certain other fees from being factored into that 3% limitation.
Under new rules issued by the Consumer Financial Protection Bureau (CFPB) for qualified mortgages, certain costs that are incidental to the loan amount and paid by the borrower — for example, title insurance fees, guarantee fees, and service charges — are limited to no more than 3 percent of the total loan amount. (A qualified mortgage must meet certain requirements with regard to the borrower's ability to repay the loan and the loan terms.) H.R. 3211 would exclude insurance held in escrow and, under certain circumstances, fees paid to companies affiliated with the creditor from the costs that would be considered in calculating the 3% limitation. H.R. 3211 would direct the CFPB to amend its regulations related to qualified mortgages to reflect the new exclusions.
Also on the House side, the Financial Services Committee is slated to mark up six different pieces of legislation all related to the structure, power, transparency and accountability of the Consumer Financial Protection Bureau, according to Ryan Donovan, CUNA SVP-legislative affairs.
Among the topics to be addressed:
- Creating an inspector general position
- Requiring a comment period prior to issuing any guidance
- Requiring the creation of a CU advisory council, a small business advisory council and a community bank council (the bureau already has created these advisory groups, but it is not required to do so; the bill would codify these advisory councils as requirements).
- Improving the examination process for the handful of credit unions that are officially examined by the CFPB.
Donovan noted that CUNA has expressed credit union support for all of these measures.
On the Senate side, CFPB Director Richard Cordray will be presenting the bureau's semi-annual report to the Senate Banking Committee. Thaler noted that Senate Majority Leader Harry Reid is likely to call for cloture on some of the more controversial nominees that are up for Senate approval, a move that could then clear the decks for the Senate to deal with less controversial nominees, such as the nomination of J. Mark McWatters to the NCUA Board.
Also of note, the student loan refi debate could be heating up in the Senate, where legislation is being considered to make it easier for borrowers to refinance student loans through federal programs at current rates.
