Community Development Bank legislation passed by the House Banking Committee Nov. 10 would require studies on simplifying adjustable rate mortgage disclosures and making them more meaningful to consumers.
The amendments to the administration's CDB legislation were among a number of regulatory easing provisions included in the bill, H.R. 3474, reported out by the panel. The bill is scheduled to go to the House Rules Committee this week; floor action is possible before Congress adjourns for the year by Nov. 24. Senate action on a similar bill, by contrast, is not expected until next year.
Also, unlike the Senate bill, the House version does not contain provisions on small business securitizations and high-cost mortgages.
The latter is of great interest to the mortgage banking industry, which is concerned that such a provision could have a "spill over" effect on the mortgage markets.
The legislation also permits Truth In Lending disclosures for home equity loans to be used for Respa purposes and allows consumers to waive the three-day right of recision on home refinancings if no advances are made.
Studies relating to mortgage issues mandated under the amendments would include real estate loan standards and the appropriateness of data being collected for Fair Housing Act purposes that differs from Home Mortgage Disclosure Act data.
The panel rejected a proposal to permit collateral based on nonresidential construction loans to be used for Federal Home Loan Bank System advances.
Not less than one-third of the $382 million included in the bill would be available to implement the Bank Enterprise Act, which would grant banks offering "lifeline" deposit accounts and increasing investments in distressed communities a reduction in their deposit insurance premiums. The amendments approved by the panel would also permit assets derived from Community Investment Program advances to be counted as qualified thrift investments for purposes of the QTL test.
The bill passed by the panel also permits the FHLBanks to waive stock purchase requirement aggregation rules for advances to members under the CIP, and permits "economic development loans" based on CIP advances to be used as collateral for FHLBank System advances.
The legislation increased the systemwide 300% cap on advances to nonqualified thrift lender members to 40%, but a proposal to remove the cap altogether faded.
Other provisions are aimed at easing auditing and other requirements imposed by the 1991 banking bill.