- The CFPB should exempt smaller IMBs from exams, in accordance with the statutory Dodd-Frank
Required to supervise corporate size, volume and risk – and limit exams of larger
IMBs to openings in States exam schedules or to state requests for the CFPB to carry out an exam. - The CFPB should put an end to regulations through enforcement, a practice that disproportionately harms smaller IMBs and their borrowers. In addition, CFPB fines and orders must be based on the severity of the violation and they must be clearly defined and finished.
- The CFPB should increase the flexibility of LO Comp rules -to help consumers by increasing competition and removing obstacles for government loans from HFA -Bonds and IMB -BIDE LOENS.
- The CFPB must immediately suspend the requirements for the register of the court for IMBs and withdraw its proposed regulatory contract rule. Both are superfluous and unnecessary for IMBs.
The Trade Group pointed to the Trump administration Executive Order, which said that over regulation “stops American entrepreneurship, crushes small companies, reduces the choice of the customer and discourages innovation.”
Completion costs for smaller IMBs are “particularly heavy, because such lenders do not miss any economies of scale of economies of scale compared to large lenders,” the Chla argued. “Federal banking regulations have long followed a policy of streamlined regulations for small banks as a recognition of this law. The CFPB should do the same for non -bank mortgage providers. “
The CHLA noted that the Trump government has already concluded that the supervisory authority of the CFPB is duplicative and superfluous. State supervisors, the administration said, must have jurisdiction, and the CFPB should not supervise small and medium -sized lenders.
In terms of streamlining the supervision of IMBs, Chla said that not -banks have already been subject to a large number of regulations – including the Fair Housing Act, the Equal Credit Opportunity Act (ECOA), the Real Estate Settlement Procedures Act (Respa), The qualified mortgage (QM) rule and much more.
Every loan officer who works for an IMB must meet the safe tests, prelicensing and permanent education -requirements and independent background controls. But Bank LOs are exempt from the Safe Act and also avoid wider CFPB -SUPERVISION.
Exams are another pain for the members of Chla. Although larger IMBs are subject to more exams than smaller IMBs, “not offering a formal and transparent exemption under this specific status to smaller IMBs creates significant CFPB nomination costs on small IMBs,” is the letter. They have to spend dozens or hundreds of thousands of dollars to prepare for exams that may never occur.
“That is why the CFPB must publicly announce a policy and follow that it will not carry out exams for smaller IMBs, which determines a threshold with regard to the size and/or loan volume that exempts at least a similar percentage of IMBs, as is excluded under $ 10 billion bank exemption threshold. ”
If this were to take place, the CHLA argues that the CFPB could still carry out an exam of a smaller IMB if a state asks that the agency is doing this, or if the agency receives a disproportionate number of complaints about a certain lender. The Chla added that the Bureau should limit exams of larger IMBs based on need.
“Much larger IMBs are subject to exams of different states, including in some cases an exam process with several states,” the letter is. “The CFPB must be aware of the efforts of the state exams and carry out exams for larger IMBs, except when there are gaps in state exams of the company or where specific states ask the CFPB to carry out an exam (eg Because of a lack of capacity). This approach is consistent with conclusions in the Treasury report 2017. ”
Another frustration of the mortgage industry is the preference of the CFPB for regulations by enforcement. The CHLA states that the purpose of mortgage rules must not be fines or fines, and the CFPB must allow IMBs to solve problems before considerable fines are imposed.
“Regulation through enforcement has disproportionately influence on smaller IMBs, because smaller IMBs do not miss the loan volume and the scale of the scale that large lenders outside of lawyers and lobbyists have to pay to stay up to date with the way in which the CFPB could interpret the rules , “wrote the Chla.
“Regulation through enforcement also has disproportionately influence on smaller IMBs, because, in contrast to when fines are imposed against large companies (where shareholders only pay the fine and absorb these as a cost of doing business), fines are made against smaller IMBs ultimately paid by private individuals, Where even a relatively smaller fine can have a significant financial impact on an individual and their company. “
Finally, the Chla focused on the 486 -page judicial order rule, which the redundant mentions, because IMBs are already obliged to provide the information to the National Multistate Licensing System (NMLS). Similarly, the proposed form contract rule adds costs and does not serve a consumer goal, the trade group argued.
