WASHINGTON — Nonbank mortgage firms are seeking formal assurance from the Consumer Financial Protection Bureau that they will not become subject to surprise audits or enforcement without involvement of a state regulator.

In a joint letter to acting CFPB Director Mick Mulvaney, the Community Home Lenders Association and the Community Mortgage Lenders of America said the agency should practice “streamlined supervision” of smaller nonbanks, which is consistent with the Dodd-Frank Act.

They noted that the current CFPB supervision regime exempts small banks from being examined by the bureau, while no such exemption exists for nonbanks.

Rep. Roger Williams, R-Texas
The two trade groups support a bill by Rep. Roger Williams, R-Texas, that would provide for streamlined CFPB regulation of qualified mortgage lenders with a net worth of less than $50 million that originated fewer than 25,000 loans the previous year. Bloomberg News

“We believe the CFPB should have a formal policy under which it will not conduct an audit or exam or take enforcement action unless the [nonbank mortgage firm’s] primary regulator (i.e. any state in which they do business) or a federal regulator provides a referral for the CFPB to take any such action,” the groups said in the Feb. 13 letter.

“This approach would establish regulatory exemptions for smaller IMBs that are in some way comparable to the exemptions that already exist for smaller banks and other depository institutions,” the groups said, referring to so-called independent mortgage banks.

That approach would still allow “the CFPB to take action if a state regulator asks the CFPB to do so or to assist in regulatory supervision," the two trade groups added.

The two groups support a bill sponsored by Rep. Roger Williams, R-Texas, that would provide for streamlined, risk-based CFPB regulation of qualified community mortgage lenders with a net worth of less than $50 million that originated fewer than 25,000 mortgage loans in the previous year.

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