WASHINGTON (10/7/15)--Both consumers and lenders would be protected under the Homebuyers Assistance Act (H.R. 3192), says CUNA in a letter urging the U.S. House to pass the bill when it votes today. In the letter, CUNA President/CEO Jim Nussle notes the bill would provide a hold-harmless period for the Consumer Financial Protection Bureau’s (CFPB) new mortgage disclosure rule through Feb. 1, 2016.
“In the long run, the Truth in lending Act-Real Estate Settlement Procedures Act integrated disclosure (TRID) forms will be a positive step for consumers and mortgage lenders, making the application process a bit simpler for borrowers,” Nussle wrote. “However, the law and its implementing regulation did not provide a transition period that would have been useful for lenders to test systems to ensure they are in compliance before actually having to comply.”
Nussle added that “the absence of a reasonable transition period puts consumers and lenders in jeopardy in the short term because lenders are immediately exposed to enforcement actions and legal liability.”
H.R. 3192, introduced by Reps. French Hill (R-Ark.) and Brad Sherman (D-Calif.) would prevent regulators from taking supervisory actions against lenders, and would shield lenders from a private right of action during the transition, provided the lenders make good faith efforts to comply with TRID.
“These protections would be positive for consumers because they would help ensure that lenders, particularly small lenders, continue to offer mortgage credit in the short term,” Nussle wrote.
Nussle added that it is important Congress act quickly on H.R. 3192, as CUNA is worried about the adverse impact not enacting the legislation could have on the mortgage market.
“Smaller lenders, which bear a disproportionate compliance burden, would be at an even greater competitive disadvantage; some lenders might leave the market, temporarily or permanently,” he wrote. “This could cause further problems in the real estate market where consumers have greater difficulty purchasing homes. This unfortunate outcome is avoidable if Congress approves this legislation.”
The House will stream today’s proceedings live on its website.