Senate Passes Bills That Affect Economic Growth, Relief, and Consumer Protection


The Senate passed a bill which impacts several areas covered by the Wall Street Reform and Consumer Protection Act. The bill is expected to be considered by the U.S. House of Representatives, and, if passed by the House and signed by the President, would become law.

The bill contains provisions impacting all residential mortgage lenders regardless of institution type, such as:

Temporary authority to originate loans for loan originators moving from a depository institution to a non-depository institution, and for loan originators moving interstate, subject to application requirements.

“No Wait For Lower Rate” Elimination of waiting period after revised Closing Disclosure, where creditor extends consumer a second offer of credit with a lower annual percentage rate.

Refinancing restrictions for loans insured by the Veterans Affairs (VA), including that a VA refinancing loan, where the first mortgage is a fixed rate and the new mortgage has an adjustable rate, may not be guaranteed, unless the new loan’s rate “is not less than 200 basis points less than the previous loan.”

Appraisal relief for real estate located in rural areas for transactions valued at less than $400,000, subject to additional conditions.
Additional provisions impact only insured depositories’ residential mortgage lending activity:

Relief from certain Home Mortgage Disclosure Act requirements for insured depositories if fewer than 500 closed-end mortgage loans in each of two preceding calendar years, except for institutions with recent Community Reinvestment Act exam ratings of “needs to improve” or “substantial noncompliance”

Additional “Qualified Mortgage” defined providing safe harbor compliance option under the Truth-in-Lending Act’s Ability to Repay requirement for insured depositories with less than $10 billion in consolidated assets

Requirement that the Consumer Financial Protection Bureau (CFPB) issue a regulation exempting insured depositories which originated less than 1,000 loans secured by first liens on dwellings and have less than $10,000,000,000 in assets from the escrow requirements relating to certain transactions.

Additional provisions relate to protecting access to manufactured homes, security freezes, and alternative credit scoring. The bill also contains a “Sense of Congress” provision which urges the CFPB to provide clearer guidance regarding certain TILA-RESPA Integrated Disclosure (TRID) requirements. Specifically, the CFPB is urged to clarify TRID’s applicability to mortgage assumption transactions, how proper origination of construction-to-permanent home loans in compliance with the TRID rule can be achieved, and the extent to which lenders can rely on model disclosures published by the CFPB without liability if recent changes to regulations are not reflected in the sample TRID Rule forms.

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The full text of the bill, which included several reforms unrelated to mortgage lending, is available here:

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