[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5907 Introduced in House (IH)]
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114th CONGRESS
2d Session
H. R. 5907
To preserve competition among mortgage lenders, provide relief from
unnecessary regulatory requirements on responsible community mortgage
lenders, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 14, 2016
Mr. Williams introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To preserve competition among mortgage lenders, provide relief from
unnecessary regulatory requirements on responsible community mortgage
lenders, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Community Mortgage Lender Regulatory
Act of 2016''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Responsible community mortgage lenders engaged in
traditional mortgage lending were not responsible for the
recent mortgage crisis.
(2) Responsible community mortgage lenders provide a
valuable and critical service to consumers by, among other
things, fulfilling the housing finance needs of the communities
they serve and providing locally based alternative sources for
mortgage financing.
(3) The activities and business practices of responsible
community mortgage lenders do not pose a substantial risk to
consumers, and did not pose a substantial risk to consumers
when the Dodd-Frank Wall Street Reform and Consumer Protection
Act was enacted.
(4) Responsible community mortgage lenders are subject to
the oversight and control of various governmental authorities
and nongovernmental actors, including the Bureau of Consumer
Financial Protection, the Department of Housing and Urban
Development, the Federal Trade Commission, State supervisory
regulators, local government supervisory regulators, mortgage
loan investors, warehouse lenders, and various other
authorities or entities. As a result of this oversight and
control, the business practices and activities of responsible
community mortgage lenders are safe, transparent to the public
and the government, and do not pose a threat to consumers, the
public at large, the United States financial markets, or the
United States economy in general.
(5) Responsible community mortgage lenders are unreasonably
burdened by increasing regulation geared to problems that they
did not create and activities that they did not and do not
engage in, and therefore responsible community mortgage lenders
are entitled to relief from certain provisions of the Dodd-
Frank Wall Street Reform and Consumer Protection Act and its
attendant regulations, including the regulations of the Bureau
of Consumer Financial Protection.
(6) Without relief many responsible community mortgage
lenders will be driven from the market thus limiting the
consumer's ability to choose a local lender for mortgage
financing and dangerously consolidating the mortgage lending
market into a smaller number of lenders.
(7) The preservation of responsible community mortgage
lenders is critical to preserving competition and preventing
increasing concentration in mortgage lending.
(8) The Bureau of Consumer Financial Protection should
prioritize its resources and ability to carry out examinations
by creating reasonable exclusions for smaller, responsible
mortgage lenders.
SEC. 3. DEFINITIONS.
(a) In General.--Section 1002 of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5481) is amended by adding at the end the
following:
``(30) Community mortgage lender.--The term `community
mortgage lender' means a lender--
``(A) who--
``(i) in the case of a depository
institution or credit union--
``(I) has assets of less than
$2,000,000,000; and
``(II) originated fewer than 25,000
mortgage loans in the preceding
calendar year or originated a gross
mortgage loan origination volume of
less than $5,000,000,000 in the
preceding calendar year; or
``(ii) in the case of a person other than a
depository institution--
``(I) has net worth of less than
$50,000,000; and
``(II) originated fewer than 25,000
mortgage loans in the preceding
calendar year or originated a gross
mortgage loan origination volume of
less than $5,000,000,000 in the
preceding calendar year; and
``(B) had mortgage loan originations in the
preceding three calendar years that consisted of 95
percent qualified mortgages when measured by either--
``(i) the number of mortgage loans
originated; or
``(ii) the dollar volume of mortgage loans
originated.
``(31) Responsible community mortgage lender.--The term
`responsible community mortgage lender' means a community
mortgage lender who has not been found by a court of competent
jurisdiction to have violated the law, or been subject to a
cease and desist order, relating to its mortgage loan
originations--
``(A) during the preceding two years; or
``(B) since such person began originating mortgage
loans, if such period is less than two years.
``(32) Mortgage loan.--The term `mortgage loan' means a
loan secured by a first lien on a 1-4 unit family residence.
``(33) Qualified mortgage.--The term `qualified mortgage'--
``(A) has the meaning given that term under section
129C(b)(2) of the Truth in Lending Act; and
``(B) includes loans insured, guaranteed, or
administered by--
``(i) the Department of Housing and Urban
Development, with regard to mortgages insured
under the National Housing Act (12 U.S.C. 1707
et seq.);
``(ii) the Department of Veterans Affairs,
with regard to a loan made or guaranteed by the
Secretary of Veterans Affairs;
``(iii) the Department of Agriculture, with
regard to loans guaranteed by the Secretary of
Agriculture pursuant to section 502(h) of the
Housing Act of 1949 (42 U.S.C. 1472(h)); and
``(iv) the Rural Housing Service, with
regard to loans insured by the Rural Housing
Service.''.
(b) Treatment of the Qualified Mortgage Requirement During Calendar
Year 2016.--For purposes of computing mortgage loan originations under
section 1002(30)(B) of the Consumer Financial Protection Act of 2010
during calendar year 2016, such computation shall be based only on the
preceding two calendar years instead of the preceding three calendar
years.
SEC. 4. PRIORITIZATION OF BUREAU EXAMINATION AND ENFORCEMENT AUTHORITY
RESOURCES.
(a) In General.--The Consumer Financial Protection Act of 2010 (12
U.S.C. 5481 et seq.) is amended by inserting after section 1031 the
following:
``SEC. 1031A. EXCLUSION RELATING TO RESPONSIBLE COMMUNITY MORTGAGE
LENDERS.
``(a) Limitations of Examination of Responsible Community Mortgage
Lenders.--Except as permitted in subsection (b), the Bureau may not
conduct any audit, examination, or investigation of, or take an
enforcement against, a responsible community mortgage lender.
``(b) Referrals by Other Agencies.--The Bureau may conduct an
audit, examination, or investigation of, or take an enforcement action
against, a responsible community mortgage lender if requested by--
``(1) a State or local regulator;
``(2) a Federal department or agency that guarantees
mortgage loans originated, held, or serviced by such lender;
``(3) the Federal Housing Finance Agency or entities
supervised by such Agency; or
``(4) any other Federal department or agency that exercises
supervisory authority over such lender.
``(c) Rule of Construction.--Nothing in this section shall be
construed as modifying, limiting, or superseding the operation of any
provision of Federal or State law, or otherwise affecting the authority
of any Federal or State department or agency other than the Bureau.''.
(b) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by inserting after the item relating to section 1031 the
following:
``Sec. 1031A. Exclusion relating to responsible community mortgage
lenders.''.
SEC. 5. STREAMLINED VENDOR AUDITS.
(a) In General.--The Consumer Financial Protection Act of 2010 (12
U.S.C. 5481 et seq.), as amended by section 4(a), is further amended by
inserting after section 1031A the following:
``SEC. 1031B. VENDOR AUDIT REQUIREMENTS RELATING TO RESPONSIBLE
COMMUNITY MORTGAGE LENDERS.
``(a) Vendor Audits.--The Bureau and the appropriate Federal
banking agencies may only require a responsible community mortgage
lender to perform an audit of a vendor or third-party contractor of the
lender if the Bureau or the appropriate Federal banking agency, as
applicable, has reasonable cause to believe that such vendor or third-
party contractor is performing services for the lender in a manner that
is causing the lender to violate the law.''.
(b) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as
amended by section 4(b), is further amended by inserting after the item
relating to section 1031A the following:
``Sec. 1031B. Vendor audit requirements relating to responsible
community mortgage lenders.''.
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