Washington, D.C., July 18, 2016 – The Community Mortgage Lenders of America (CMLA) today applauded Rep. Roger Williams (R-TX) for introducing legislation that will bring common sense to regulatory oversight of small, community-based mortgage lenders. CMLA has called for equitable regulatory treatment of small lenders and the H.R. 5907 Community Mortgage Lenders Regulatory Act of 2016 would achieve that. (Executive Summary)
CMLA Chair Brooke Anderson Tompkins noted this legislation “would prioritize CFPB oversight where it will most directly benefit consumers: onto our nation’s largest lenders and lenders that have clearly run afoul of sound lending rules. Responsible community lenders offering plain vanilla mortgage products did not cause the downturn or harm consumers. Rep. Williams’ bill strikes a balance of maintaining safe lending while freeing up resources so that more qualified Americans can get a mortgage to help build their families’ futures.”
Importantly, the bill codifies the definition of a “responsible” community mortgage lender and exempts them from CFPB examinations and enforcement absent a separate referral from a state or Federal regulator.
In addition, responsible community mortgage lenders would be exempt from requirements to audit a vendor or third party contractor absent reason to suspect illegal activity.
To qualify for these exemptions, a lender must meet the 4 metrics of a responsible lender as defined in the legislation, which are:
- Non-banks with a net worth of less than $50 million or banks with assets of $2 billion or less
- Had originated either less than $5 billion or fewer than 25,000 mortgage loans in the prior year.
- Had QM loans account for 95% or more of its loan volume over the preceding 3 years
- Had not violated the law or been subject to a cease and desist order relating to its mortgage activities in the preceding 2 years
CMLA has worked closely with the Community Home Lenders Association (CHLA) on this legislation.
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About the CMLA
CMLA is the only trade association solely dedicated to advocating for independent, community-based residential mortgage lenders. Founded in 2009, The CMLA is committed to the preservation of a thriving independent mortgage lending sector, which increases competition in the industry and, thus, provides borrowers with greater choice and lower costs. The CMLA membership includes lenders nationwide that, collectively, originate more than $100 billion worth of residential mortgage loans annually. The CMLA works to ensure the interests of its members are effectively represented before members of Congress, Federal regulators and the Executive branch.