CUNA details mortgage reg. relief options for SBC hearing
April 16, 2015
WASHINGTON (4/17/15)--CUNA sent a number of recommended statutory changes to the U.S. Senate Banking Committee, changes that would remove regulatory barriers for consumers obtaining mortgage credit. The committee hosted a hearing Thursday on the matter, and CUNA's letter was sent for the hearing's record.
"As member owned, not-for-profit financial cooperatives, credit unions seek to meet members' demand for sound financial products like mortgages, but often face significant regulatory barriers as they try to help members achieve homeownership or expand the stock of affordable rental homes," reads the letter, signed by CUNA President/CEO Jim Nussle. "We welcome the opportunity to comment on a few of those barriers and to offer suggestions for relief."
CUNA made the following recommendations to remove regulatory barriers to increase access to mortgage credit:
Deem all mortgages in portfolio Qualified Mortgages (QMs), meaning a mortgage with features that make it more affordable. Should all mortgaged held in portfolio and services by the underwriting financial institution be deemed QMs, financial institutions will have very strong incentives to originate quality loans;
The Senate should enact legislation that would exclude title insurance charges and escrowed homeowners' premiums from the points and fees calculation;
Urge Congress to discuss withdrawing the Federal Housing Finance Agency's proposal to revise its Federal Home Loan Bank (FHLB) membership rules with the agency. CUNA believes Congress, not the regulator, should define who can be members of the FHLB program, since there is not statutory obligation to impose new membership limits;
Allow privately insured credit unions membership to the FHLB program. Committee Ranking Member Sen. Sherrod Brown (D-Ohio) and Sen. Rob Portman (R-Ohio) introduced a bill last Congress that would correct this, and the House just passed a similar bill;
Improve the Consumer Financial Protection Bureau's (CFPB) Truth in Lending Act-Real Estate Settlement Procedures Act (TILA-RESPA) closing disclosure waiting period. CUNA believes a personal financial emergency waiver should be clarified and expanding, and the delivery requirement should be reduced to two business days, instead of the current three days; and
Encouraging Congress to provide and exclusion to the member business lending cap for loans made for purchase of one to four unit non-owner occupied residential dwellings, to put credit unions on the same level as banks.
"These are only a few of the relevant barriers credit unions face in providing members access to affordable mortgage credit, but they are substantial," Nussle wrote.