[Congressional Record Volume 164, Number 115 (Tuesday, July 10, 2018)]
[House]
[Pages H6005-H6007]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BUILDING UP INDEPENDENT LIVES AND DREAMS ACT
Mr. HUIZENGA. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5953) to provide regulatory relief to charitable
organizations that provide housing assistance, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5953
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``Building
Up Independent Lives and Dreams Act'' or the ``BUILD Act''.
SEC. 2. MORTGAGE LOAN TRANSACTION DISCLOSURE REQUIREMENTS.
(a) TILA Amendment.--Section 105 of the Truth in Lending
Act (15 U.S.C. 1604) is amended by inserting after subsection
(d) the following:
``(e) Disclosure for Charitable Mortgage Loan
Transactions.--With respect to a mortgage loan transaction
involving a residential mortgage loan offered at zero percent
interest primarily for charitable purposes by an organization
having tax-exempt status under section 501(c)(3) of the
Internal Revenue Code of 1986, forms HUD-1 and GFE (as
defined under section 1024.2(b) of title 12, Code of Federal
Regulations), together with a disclosure substantially in the
form of the Loan Model Form H-2 (as defined under Appendix H
to section 1026 of title 12, Code of Federal Regulations)
shall, collectively, be an appropriate model form for
purposes of subsection (b).''.
(b) RESPA Amendment.--Section 4 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2603) is amended
by adding at the end the following:
``(d) With respect to a mortgage loan transaction involving
a residential mortgage loan offered at zero percent interest
primarily for charitable purposes, an organization having
tax-exempt status under section 501(c)(3) of the Internal
Revenue Code of 1986 may use forms HUD-1 and GFE (as defined
under section 1024.2(b) of title 12, Code of Federal
Regulations) together with a disclosure substantially in the
form of the Loan Model Form H-2 (as defined under Appendix H
to section 1026 of title 12, Code of Federal Regulations),
collectively, in lieu of the disclosure published under
subsection (a).''.
(c) Regulations.--Not later than 180 days after the date of
the enactment of this Act, the Director of the Bureau of
Consumer Financial Protection shall issue such regulations as
may be necessary to implement the amendments made by
subsections (a) and (b).
(d) Effective Date.--The amendments made by subsections (a)
and (b) shall take effect on the date of the enactment of
this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Michigan (Mr. Huizenga) and the gentlewoman from California (Ms. Maxine
Waters) each will control 20 minutes.
The Chair recognizes the gentleman from Michigan.
General Leave
Mr. HUIZENGA. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in support of H.R. 5953, the Building Up
Independent Lives and Dreams, or BUILD, Act, which would cut some of
the regulatory red tape and alleviate unnecessary burdens that were
created by Dodd-Frank.
The Truth in Lending Act, or TILA, as it is referred to, and the Real
Estate Settlements Procedures Act, also known as RESPA, required
lenders to provide consumers disclosures about the estimated and actual
real estate settlement costs and financial terms of the mortgages that
they offer.
Among other requirements, RESPA required standardized disclosures,
such as good faith estimates, of the costs that the borrower should
expect to pay at closing, and a list of closing costs commonly known as
the HUD-1 document.
TILA required lenders to disclose the cost of credit and the
repayment terms of mortgage loans before borrowers entered into a
transaction. These disclosures were intended to help consumers compare
the terms and make informed decisions regarding the suitability of
various mortgage products and services that they were looking at
purchasing.
[[Page H6006]]
However, Dodd-Frank mandated that the Bureau of Consumer Financial
Protection promulgate ``a single integrated disclosure for mortgage
loan transactions . . . to aid the borrower . . . in understanding the
transaction by utilizing readily understandable language to simplify
the technical nature of the disclosures.''
It seems to me that in an effort to simplify the language, we might
have added some more complicated language. But nonetheless, it remains
compliant with both TILA and RESPA, which are very important.
I can tell you, as a former licensed Realtor, these disclosures and
these closing documents are extremely important.
What we have seen, though, under this current situation, the TILA-
RESPA Integrated Disclosure, or TRID, as it is called, the TRID rule
was born out of this.
The final TRID forms combined elements of the good faith estimate,
the HUD-1, and the TILA disclosure.
While these new forms were designed to be more consumer friendly--
they include sections on balloon loans and adjustable rate mortgages
that may be applicable to traditional mortgage lenders--these forms are
not relevant to charitable organizations like Habitat for Humanity,
however.
Additionally, the TRID integrated disclosure forms pose significant
implementation and compliance challenges for these charitable
organizations because they include difficult-to-understand timing and
delivery requirements and other practical implementation issues that go
well beyond the previous content requirements, such as requiring
purchasing and training of costly complex software intended for
traditional mortgage lenders. Therefore, many charitable organizations
have difficulty with fulfilling the needed compliance related to the
origination and servicing of their loans.
The BUILD Act, introduced by Representative Loudermilk and
Representative Sherman, would roll back requirements of the TILA-RESPA
Integrated Disclosures Rule for charities, and only charities, like
Habitat for Humanity and others, and, instead, allow these charities to
use the good faith estimate and HUD-1 mortgage forms that had been in
place previously.
Groups like Habitat for Humanity and their local State organizations
specialize in providing housing for low income and rural communities.
The financing that is done at a zero percent interest rate to provide
minimal cost to the occupant is commendable and a goal that we all
have.
This bill cuts yet another senseless and poorly written provision of
Dodd-Frank that will help provide affordable housing for low income
Americans in search of the American Dream.
Specifically, this bipartisan bill would provide tax-exempt nonprofit
organizations originating these zero interest mortgage loans the
flexibility to choose the simplest and most cost effective delivery of
the mortgage disclosures.
Now these charitable organizations will be able to use their very
scarce resources for building, repairing, and rehabilitating housing
instead of spending it on costly compliance software.
Mr. Speaker, I would like to commend the bipartisan work of
Representatives Loudermilk and Sherman on the BUILD Act, which passed
the Financial Services Committee by a vote of 35-0. I urge all of my
colleagues to vote in favor of H.R. 5953, the BUILD Act, and I reserve
the balance of my time.
{time} 1545
Ms. MAXINE WATERS of California. Mr. Speaker, I yield such time as he
may consume to the gentleman from California (Mr. Sherman), a senior
member of the Financial Services Committee and the lead Democratic
sponsor of this bill.
Mr. SHERMAN. Mr. Speaker, I thank the gentlewoman for yielding.
I would like to thank my colleague from Georgia (Mr. Loudermilk) for
working with me on this bill, titled the Building Up Independent Lives
and Dreams, or BUILD Act. This has been a collaborative process, and I
am pleased to serve as the chief Democratic sponsor.
We have heard from a variety of chapters of Habitat for Humanity.
They are having difficulty dealing with the new TILA-RESPA Integrated
Disclosure form, chiefly because they don't have the software to deal
with that form. The new form is a good form. The old forms were pretty
good as well, but what is really good for the consumer in this case is
that they are getting a zero percent loan.
So what this bill says is that, if you are a bona fide nonprofit
organization providing the new homeowner with a zero percent loan, you
have the flexibility to either use the new form or to use the old
forms.
The new form is good. The old forms were pretty good, too. A zero
percent loan is very good for the consumer.
This bill is supported by Habitat for Humanity International and the
National Housing Conference. It passed the Financial Services Committee
53-0, and I urge everyone to vote ``yes.''
Mr. HUIZENGA. Mr. Speaker, I yield such time as he may consume to the
gentleman from Georgia (Mr. Loudermilk), my colleague from the
Financial Services Committee, the author of the BUILD Act.
Mr. LOUDERMILK. Mr. Speaker, I thank my colleague and the gentleman
from Michigan (Mr. Huizenga) for yielding time for me to speak on what
I think is a very important bill.
Mr. Speaker, I rise today in strong support of this bill, the bill
which is entitled Building Up Independent Lives and Dreams Act, also
better known as the BUILD Act. This bill is proof that, even in this
Chamber, we can rise above politics and let common sense prevail
occasionally.
I would like to first start by thanking my colleagues on both sides
of the aisle who have worked with me and my staff to make this a very
strong, bipartisan effort. I appreciate my colleague Mr. Sherman, who
just spoke, for negotiating reasonable changes to the bill and for
being an original cosponsor. I also want to thank Ms. Tenney, Ms.
Velazquez, and Mr. Budd for their work and for cosponsoring the bill as
well.
Mr. Speaker, the Dodd-Frank Act required the Consumer Financial
Protection Bureau to combine the TILA loan estimate and the RESPA
closing disclosure forms into one integrated form, which, as you have
heard, is called the TRID.
While the TRID forms were well intended to help ensure that home
buyers receive essential information about the costs and terms of their
home loan, the TRID rule has some unintended consequences on nonprofit
organizations such as Habitat for Humanity.
The TRID rule is a whopping 1,888 pages long and is very complicated.
The forms include sections on balloon loans and adjustable-rate
mortgages, things that may be relevant to traditional mortgage lenders
but are not applicable to nonprofits that solely offer low-cost housing
to needy families. The complex and complicated TRID forms cause
confusion to Habitat home buyers, staff, and their volunteers.
Besides the complexity, the TRID disclosures require software for
lenders to be able to fill them out, which has been too costly for many
local Habitat organizations. The vast majority of the more than 1,200
local Habitat affiliates nationwide are small, community-based
organizations with very small mortgage portfolios and few, if any,
full-time staff.
These organizations have experienced challenges with the cost and
complexity of these new mortgage disclosure forms. To address these
problems, the BUILD Act relieves charities from the costs and the
complexity of the TRID rule but ensures that the terms of these
mortgage loans are disclosed.
Currently, all mortgage lenders making five or fewer loans a year are
exempt from TRID and, instead, use the same mortgage disclosure forms
that were in place before Dodd-Frank. The BUILD Act simply extends this
exemption to nonprofits which are eligible for tax-exempt charitable
donations and are making zero interest mortgage loans, regardless of
how many mortgage loans they are making per year.
The BUILD Act will allow local Habitat organizations to choose
whether to use the previous, simplified reporting or the more complex
TRID reporting. The BUILD Act is supported by Habitat for Humanity
International and the National Housing Conference.
In closing, I want to reiterate that the purpose of this bill is to
help nonprofits spend more time fulfilling their
[[Page H6007]]
mission of providing low-cost housing to needy families and less time
sitting in an office doing regulatory paperwork. The BUILD Act
recognizes that one size does not fit all when it comes to regulating
these charities and gives themselves the flexibility to choose which
mortgage disclosure forms work best for them.
Mr. Speaker, the BUILD Act passed the Financial Services Committee
with a unanimous vote of 53-0. I urge all of my colleagues to support
this bill.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, I want to thank my colleague, Mr. Sherman, for working
across the aisle to develop H.R. 5953, the Building Up Independent
Lives and Dreams Act, or the BUILD Act, which will assist nonprofits in
providing affordable housing to those in need.
Some nonprofit organizations, like Habitat for Humanity, help
borrowers who would otherwise not be able to afford a home by offering
zero percent interest mortgages with terms that ensure the borrowers
have the ability to repay the loans while also taking care of other
household expenses. Oftentimes, these nonprofits rely heavily on
limited staffs or volunteer labor to underwrite mortgages for families
in need.
Because of these unique dynamics, some smaller affiliates of these
types of organizations have had a bit of difficulty adapting to the
current updated disclosure forms that are used to inform mortgage
borrowers about the material terms and costs of their loans. This bill
would give those nonprofits the flexibility to choose whether to use
truth-in-lending, good-faith estimate, and HUD-1 mortgage disclosure
forms when originating a mortgage or the TILA-RESPA integrated
disclosure, or TRID, forms.
Even though this very narrow exemption already applies to
organizations that make five or fewer mortgages annually, I believe we
are all in agreement that extending this flexibility to charitable
nonprofits with a unique business model like Habitat is a positive
change.
Nonprofits like Habitat for Humanity operate with different business
models and traditional financing institutions. They are and they serve
a different clientele. It is clear that the BUILD Act does not provide
any opportunity for other types of lenders to take advantage of the
carve-out in a way that could potentially harm borrowers. With that in
mind, I support this bill, and I encourage my colleagues to do the
same.
Mr. Speaker, I have no more requests for time, and I yield back the
balance of my time.
Mr. HUIZENGA. Mr. Speaker, I, too, want to commend our colleagues for
working in a bipartisan manner, Mr. Loudermilk and Mr. Sherman, not
only for dealing with this in committee; there was some trust that was
shown on all sides to move forward on that, and this is the way the
system is supposed to work. Congratulations.
I look forward to supporting this bill and request that all of my
colleagues do the same.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Michigan (Mr. Huizenga) that the House suspend the rules
and pass the bill, H.R. 5953.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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