[Congressional Record (Bound Edition), Volume 163 (2017), Part 14]
[House]
[Pages 19625-19634]
[From the U.S. Government Publishing Office, www.gpo.gov]




           COMMUNITY INSTITUTION MORTGAGE RELIEF ACT OF 2017

  Ms. TENNEY. Mr. Speaker, pursuant to House Resolution 647, I call up 
the bill (H.R. 3971) to amend the Truth in Lending Act and the Real 
Estate Settlement Procedures Act of 1974 to modify the requirements for 
community financial institutions with respect to certain rules relating 
to mortgage loans, and for other purposes, and ask for its immediate 
consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 647, an 
amendment in the nature of a substitute consisting of the text of Rules 
Committee Print 115-44 is adopted and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 3971

       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 Institution 
     Mortgage Relief Act of 2017''.

     SEC. 2. COMMUNITY FINANCIAL INSTITUTION MORTGAGE RELIEF.

       (a) Exemption From Escrow Requirements for Loans Held by 
     Smaller Creditors.--Section 129D of the Truth in Lending Act 
     (15 U.S.C. 1639d) is amended--
       (1) by adding at the end the following:
       ``(k) Safe Harbor for Loans Held by Smaller Creditors.--
       ``(1) In general.--A creditor shall not be in violation of 
     subsection (a) with respect to a loan if--
       ``(A) the creditor has consolidated assets of 
     $25,000,000,000 or less; and
       ``(B) the creditor holds the loan on the balance sheet of 
     the creditor for the 3-year period beginning on the date of 
     the origination of the loan.
       ``(2) Exception for certain transfers.--In the case of a 
     creditor that transfers a loan to another person by reason of 
     the bankruptcy or failure of the creditor, the purchase of 
     the creditor, or a supervisory act or recommendation from a 
     State or Federal regulator, the creditor shall be deemed to 
     have complied with the requirement under paragraph (1)(B).''; 
     and
       (2) by striking the term ``Board'' each place such term 
     appears and inserting ``Bureau''.
       (b) Modification to Exemption for Small Servicers of 
     Mortgage Loans.--Section 6 of the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding 
     at the end the following:
       ``(n) Small Servicer Exemption.--The Bureau shall, by 
     regulation, provide exemptions to, or adjustments for, the 
     provisions of this section for a servicer that annually 
     services 30,000 or fewer mortgage loans, in order to reduce 
     regulatory burdens while appropriately balancing consumer 
     protections.''.

  The SPEAKER pro tempore. The bill shall be debatable for 1 hour 
equally divided and controlled by the chair and ranking minority member 
of the Committee on Financial Services.
  After 1 hour of debate, it shall be in order to consider the further 
amendment printed in part B of House Report 115-443, if offered by the 
Member designated in the report, which shall be considered read and 
shall be separately debatable for the time specified in the report 
equally divided and controlled by the proponent and an opponent.
  The SPEAKER pro tempore. The gentlewoman from New York (Ms. Tenney) 
and the gentlewoman from California (Ms. Maxine Waters) each will 
control 30 minutes.
  The Chair recognizes the gentlewoman from New York.

[[Page 19626]]




                             General Leave

  Ms. TENNEY. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
to submit extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from New York?
  There was no objection.
  Ms. TENNEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, over the last 10 years, the community financial 
institution industry has undergone a dramatic transformation. Since 
2006, more than 1,500 banks have failed, been acquired, or merged, due 
to economic factors and the overwhelmingly expensive regulation brought 
forth by the passage of the Dodd-Frank Act.
  During this same period, there has been a drought in de novo banks. 
In fact, only five new banks charters and 16 new credit union charters 
have been granted.
  Today, for the first time in over 125 years, there are fewer than 
6,000 banks and, roughly, 6,000 credit unions serving all consumers in 
the United States. This is proof that the community financial 
institutions need smart, commonsense regulatory relief so they can 
properly serve local communities by assisting with small business 
startups and consumer credit.
  My bill, H.R. 3971, the Community Institution Mortgage Relief Act, 
would alleviate harmful burdens on small institutions across the Nation 
while saving money for low-income borrowers. This bipartisan measure 
would exempt small community-based institutions from mandatory escrow 
requirements.
  My bill will also provide relief from new regulations that have 
nearly doubled the cost of servicing loans, specifically to low-income 
borrowers. I know that certain institutions will wish to continue to 
provide the same escrow services to their consumers, and they are 
welcome to do that.
  By offering these real changes, smaller institutions--like the GOP 
Federal Credit Union, for example, in my district--can once again focus 
their full attention on relationship lending in the community without 
worry of government overregulation.
  Once again, the current law mandates that all institutions follow 
escrow requirements, which raises the cost of credit for those 
borrowers who can least afford it, while harming small local 
institutions.
  Mr. Speaker, I specifically thank the gentleman from California (Mr. 
Sherman) for working with me on this bill, and I appreciate his support 
throughout the process.
  Mr. Speaker, I urge all of my colleagues to vote for the bill.
  Mr. Speaker, I reserve the balance of my time, and I ask unanimous 
consent that the gentleman from Texas (Mr. Hensarling), the chairman of 
the Financial Services Committee, control the remainder of the time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from New York?
  There was no objection.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I rise today in opposition to H.R. 3971.
  Contrary to what is implied by its title, H.R. 3971 would not provide 
regulatory relief to community banks. Instead, this bill would allow a 
large number of mortgage services to drop important consumer 
protections and set the stage for a return of the harmful practices of 
the subprime meltdown and the worst financial crisis since the Great 
Depression.
  Dodd-Frank tasked the Consumer Financial Protection Bureau with 
implementing mortgage rules under the Truth in Lending Act that would 
restrict the types of practices that led to the financial crisis. This 
bill would harm consumers by raising the Consumer Financial Protection 
Bureau's exemption threshold on escrow accounts requirements for higher 
priced mortgage loans. Mortgages are classified as higher priced if the 
annual percentage rate--or APR--exceeds the average prime offer rate by 
1.5 percent, and higher priced mortgage loans often reflect riskier or 
subprime borrowers.
  Pursuant to the Dodd-Frank Act, the Consumer Financial Protection 
Bureau issued escrow rules that require borrowers with higher priced 
mortgage loans to escrow their homeowners insurance, property taxes, 
and private mortgage insurance for at least the first 5 years of their 
mortgage.
  Escrow accounts are an important consumer protection mechanism, 
especially for higher risk borrowers, because they ensure that 
homeowners have funds for these expenses, thereby reducing mortgage 
default or loss of the property. In fact, before the Consumer Financial 
Protection Bureau issued its final rule on escrow requirements in 2013, 
a Federal Reserve study from 2011 found that consumers with higher 
priced mortgages that did not have an escrow account in the first year 
after the consummation of their mortgage had higher instances of 
default.
  Escrow accounts also keep homeowners from being blindsided by 
additional costs at the end of each year and provide a more accurate 
monthly cost estimate for homeownership when the loan is originated. 
That is why the Consumer Financial Protection Bureau's rules are 
designed to ensure that homeowners understand and can meet the full 
cost of homeownership.
  Even though escrow accounts are particularly important for these 
higher priced loans, they are certainly not unique. In fact, most 
homeowners escrow these funds. Loans insured by the Federal Housing 
Administration and the U.S. Department of Agriculture must have 
borrower escrow accounts, and conventional mortgages with a loan-to-
value ratio of 80 percent or higher require them as well.
  I have not heard a single convincing argument as to what is so 
burdensome about banks with $25 billion in assets ensuring that their 
borrowers have enough money set aside every month to pay their taxes 
and insurance.
  Furthermore, banks with less than $2 billion in assets that serve 
rural or underserved areas are already exempt from the Consumer 
Financial Protection Bureau's escrow requirements, which reflects the 
Bureau's commitment to balanced and tailored regulations. This bill 
would make a dramatic leap from the Consumer Financial Protection 
Bureau's targeted relief and exempt banks up to $25 billion in assets, 
or over 98 percent of banks, from the escrow requirement. They would 
get this exemption regardless of whether they are serving underserved 
borrowers and without any evidence that this large exemption would 
increase access to credit for those who need it.
  The Consumer Financial Protection Bureau also addressed the fact that 
large servicers, especially servicers that serviced loans they did not 
own for an extended period of time, often did not adequately 
communicate with customers or appropriately track paperwork. During the 
crisis, this contributed to millions of unnecessary foreclosures and, 
later on, several billion-dollar settlements for abusive and fraudulent 
business practices.
  In its rule, the Consumer Financial Protection Bureau also provides 
other flexibilities through exemptions to the Real Estate Settlement 
Procedures Act loan servicing and escrow account administration 
requirements to only small bank servicers, if they and their affiliates 
own the loans they service, and service no more than 5,000 loans each 
year. H.R. 3971 would increase this exemption by 500 percent, from 
5,000 loans a year to 30,000 loans, allowing significantly larger bank 
servicers to avoid these important consumer safeguards, and only 
requiring the lenders to hold the loans in portfolio for 3 years.

                              {time}  1230

  So let's be clear, homeowners do not get to choose their own mortgage 
servicer, and the least we can do is ensure that they are adequately 
protected after they sign on the dotted line.
  As we saw leading up to the 2008 financial crisis, servicers often 
choose profits over people, and that is why we need the Consumer Bureau 
to look out for the needs of consumers. The Consumer Bureau has 
continued to do its

[[Page 19627]]

job in spite of the unrelenting Republican campaign to slow it down or 
eliminate it completely.
  Simply put, H.R. 3971 would enable larger servicers, whose incentives 
are not aligned with the owners of the loans or the borrowers, to be 
able to revive the abusive practices involved with predatory lending 
that contributed to the 2008 financial crisis. This is the second time 
in less than 2 weeks that I have come before you to discuss a bill that 
would erode vital consumer protections under the Truth in Lending Act 
for borrowers with high-priced mortgage loans.
  I cannot support legislation that would keep consumers looking at 
high-cost mortgages from the vital protections and scrutiny they 
deserve. For all these reasons, I oppose H.R. 3971.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in strong support of H.R. 3971, the Community 
Institution Mortgage Relief Act. It is an important bill that is 
cosponsored by a bipartisan group of Members--again, bipartisan. It was 
approved in the Financial Services Committee with a strong bipartisan 
vote of 41-19, and it has a long track record of bipartisan support, 
and all Members should take note of this.
  I want to thank the gentlewoman from New York (Ms. Tenney), who is a 
fine member of the Financial Services Committee. I want to thank her 
for introducing the legislation and really helping lead our 
congressional effort to provide needed regulatory relief for our small 
community banks and credit unions, to give them relief from rules that 
are unfairly restricting our constituents' access to mortgage credit. 
This is mortgage credit that would help Americans achieve a greater 
level of financial independence by being able to achieve perhaps their 
version of the American Dream, a home they can actually afford to keep.
  H.R. 3971 is a narrowly focused, modest effort to resolve concerns 
related to the Consumer Financial Protection Bureau's rules 
implementing Dodd-Frank Act provisions on escrows and mortgage 
servicing. The CFPB's escrow requirements for property taxes and 
insurance are unnecessary, they are impractical, and they are a 
significant expense that just makes it harder for community banks and 
credit unions to offer mortgage loans to their customers and members.
  These escrow accounts are the accounts that people use to pay their 
taxes and pay their homeowners insurance. With the amendment soon to be 
introduced by the gentleman from California (Mr. Sherman), a cosponsor 
of this legislation, this bipartisan bill would simply relieve certain 
small community banks and credit unions from the obligation to provide 
escrow accounts if they have consolidated assets of $10 billion or less 
and hold the mortgage on their balance sheet for 3 years.
  Again, Mr. Speaker, if they are holding the mortgage on their balance 
sheet, they have every incentive--every incentive to protect the 
collateral and ensure that tax and insurance payments are current. 
There is no reason to force them, these community banks and credit 
unions, to go through this very expensive process of escrowing, 
particularly if the customer or the credit union member doesn't want 
it.
  A large majority of community banks do not currently escrow because 
of the cost of which I have spoken. And requiring them to do so, Mr. 
Speaker, is only going to stop them from making loans; fewer home 
loans, fewer people with homeownership opportunity.
  You know, a community banker in Missouri recently told us that the 
CFPB's rule has forced his bank to ``limit in-house residential real 
estate lending.'' The banker went on to say: ``This is hurting the 
housing market and our community.'' That just shouldn't be happening, 
Mr. Speaker.
  A credit union official in Pennsylvania told us that this 
bureaucratic CFPB requirement has caused his credit union members to 
become ``very upset and confused as to why they were unable to pay 
their taxes how they always had.''
  He went on to write: ``These members had managed their tax and 
insurance payments for years without institution interference, but 
suddenly they feel like the government now told them they were not 
responsible enough to manage their own affairs.''
  This echoes precisely what we learn from a credit union leader in 
Pennsylvania who wrote a letter saying that ``changes to mortgage 
servicing rules have made it more expensive and more time consuming. 
Servicing rules and regulations have become a full-time regulatory and 
compliance nightmare.'' Again, Mr. Speaker, fewer home loans means 
fewer homes for our constituents. It is not right.
  To fix these problems, H.R. 3971 would also increase the small 
servicer exemption threshold from 5,000 mortgages to 20,000 mortgages 
annually, which better delineates small servicers from the large 
servicers. A community bank or credit union that services fewer than 
20,000 mortgages should not be subject to the same regulatory scrutiny 
as the big financial institution that has a $2 trillion servicing 
portfolio.
  Again, these important reforms will give smaller credit unions and 
community banks greater flexibility to ensure more of their members and 
customers can get a loan to buy a home and stay in their home.
  Again, Mr. Speaker, Ms. Tenney's bill has strong bipartisan support. 
It has in the past; I expect it will have it again today. It solves a 
real problem for our constituents, and I urge adoption of the measure.
  Mr. Speaker, I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I think it is important for us to realize that, in 
present law, community banks of $2 billion or less are exempted from 
requiring escrow accounts on higher priced loans if they serve rural 
and underserved areas. So we are talking about present law that gives 
this exemption. And not only does it exempt these real community banks 
of $2 billion or less, the banks are required to serve rural 
communities and underserved areas.
  This is so important because, oftentimes, these are loans to riskier 
customers. These are loans where they are charging a higher interest 
rate. These are loans where they are taking more risk, and so when we 
hear those on the opposite side of the aisle talking about different 
ways to service the rural communities, this is one way that the law 
allows that kind of attention to rural communities and underserved 
areas. They say: Small community banks, you don't have to have escrow 
accounts, and so what we are saying to you is give your attention to 
these rural and underserved areas where they are higher priced loans, 
they are riskier accounts, and we are not going to require you to have 
to force upon these kinds of accounts the rules that will be forced 
upon different kinds of financial institutions.
  If we adopt this bill, it would not be about community banks at all. 
And I have to disagree with my chairman of the committee who talked 
about this, in some way, enhancing community banks' ability to service 
rural and underserved areas. They are talking about expanding the 
exemption from $2 billion or less to $25 billion. That is not a 
community bank. We don't have any community banks that are worth $25 
billion or more. I want everybody to be clear what this bill is 
attempting to do.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 5 minutes to the distinguished 
gentleman from Missouri (Mr. Luetkemeyer), the chairman of the 
Financial Services Subcommittee on Financial Institutions and Consumer 
Credit.
  Mr. LUETKEMEYER. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Hensarling), our distinguished chairman of the committee.
  I want to start by thanking the gentlewoman from New York (Ms. 
Tenney), who has become a real advocate for small financial 
institutions and their customers. Escrow requirements are costly and 
burdensome for

[[Page 19628]]

community banks and credit unions. Many institutions lack the resources 
to create and maintain escrow accounts in house, and outsourcing the 
work is, in many cases, cost prohibitive. But this doesn't mean that 
these financial institutions shouldn't be in the business of mortgage 
lending.
  H.R. 3971 amends the Truth in Lending Act to direct the Consumer 
Financial Protection Bureau to exempt from certain escrow requirements 
a loan secured by a first lien on a principal dwelling if the loan is 
held by a creditor with assets of $25 billion or less.
  Under the bill, the Bureau must also provide either exemptions to or 
adjustments from the mortgage loan servicing and escrow requirements of 
the Real Estate Settlement Procedures Act. That relief applies only to 
servicers of 30,000 or fewer mortgage loans. These aren't high 
thresholds, nor are the institutions that will benefit large or 
complex.
  The gentlewoman's legislation is targeted squarely on the small banks 
and credit unions servicing Main Street; the financial institutions 
that have relationships with their customers.
  This is an important aspect of the bill that isn't delineated in the 
legislative text. I can tell you, as someone who has made loans in my 
community for more than 30 years, that these small institutions care 
about their customers. Community bankers help people fulfill their 
dreams of homeownership because they care about the customer and 
economic health of their community.
  The unfortunate reality is that, across the Nation, these banks and 
credit unions are exiting the residential mortgage business. I heard 
from one just a few days ago. It isn't necessarily one rule that is 
driving this trend. It is the onslaught of rules from the CFPB and the 
Federal prudential regulators that, in totality, make mortgage lending 
and servicing cost prohibitive.
  These rules aren't helping consumers. They are forcing banks to cut 
off services and access to mortgage credit. They are bushing borrowers 
to large financial institutions and nonbank servicers, the very 
entities that the ranking member and some of my friends on the other 
side of the aisle say pose the greatest threat to consumers.
  The gentlewoman's legislation ensures that consumers continue to have 
various credit choices by allowing smaller institutions to remain in 
the mortgage market without being deterred by the high cost of 
regulatory compliance. The increase in the small servicer exemption 
threshold will better delineate small servicers from the large 
servicers and give credit unions and community banks greater 
flexibility. This flexibility will help to ensure that more of their 
customers have access to the mortgage market and achieve the dream of 
homeownership.
  We shouldn't be driving that business away from small servicers, and 
we shouldn't subject community institutions, in this instance, to the 
same regulatory regime as larger ones.
  This is an issue the Financial Services Committee has worked on for 
several years, always with bipartisan support. I want to thank the 
gentlewoman from New York for picking up this legislation and for 
diligently working on this matter. I hope my colleagues will join me in 
supporting H.R. 3971 and other measures that allow our Nation's smaller 
financial institutions, their customers, and their communities to 
thrive.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I think it is important to further explain what this 
bill would do and why it could be harmful.
  Under the present law, the Real Estate Settlement Procedures Act 
would require that the servicers handle no more than 5,000 or less 
loans. Why is this important? It is important because when you have 
servicers that are handling a relatively small number of these kinds of 
accounts, they can pay attention to them.
  Don't forget, these are loans by community banks. They are riskier, 
they are higher priced loans, they are directed toward rural 
communities and communities that basically you have to pay a lot of 
attention to when you give out these loans. And now this bill would 
say: Yes, we know that when you are servicing a small number, 5,000 or 
less, that the services have to pay attention because they are under 
the rule of the Real Estate Settlement Procedures Act, and that act 
says not only do you have to pay attention and you have to contact your 
borrower when you are going to transfer the loan--and let me tell you 
how important this is.
  This is so important because when you transfer a loan, if you don't 
give the kind of notification to the borrower that they will understand 
that the originator of the loan no longer has the servicing or has the 
same servicing contract that is now going to move to another servicer, 
then people, oftentimes, end up not sending their payment to the right 
place. And guess what, I have seen this go on for months, and then 
people end up in a situation where they are defaulting on the loan, and 
the new servicers are putting them in a position where now their homes 
are in danger.

                              {time}  1245

  So this contact, this oversight, this attention that you pay to these 
small borrowers is so important, and that is why the 5,000.
  Now, with this bill, they want to take it up to 30,000. What does 
that mean? It means that we are going to see the kind of problems that 
we have seen in the subprime meltdown that we have gone through.
  We have found that servicers caused us the most problems. Of course, 
they didn't service the loans adequately. They lost them. They had 
people applying over and over again.
  First of all, we discovered that many of the servicers had no 
training, that they were literally hired off the street, and that they 
were basically saying to senior citizens, 75 and 80 years old: We lost 
your paper. Reapply again. Reapply again. We are sorry.
  It has been just an awful situation that was created because the 
servicers could not handle the volume that they were contracted with, 
oftentimes, for the financial institution that they were supposed to be 
doing this work for.
  So, here you have a bill that literally is not about community banks. 
This is about increasing the number of banks that can now have the kind 
of protection that we were giving to the very small community banks. So 
don't believe this is about community banks.
  In addition to that, what you are doing is you are changing the rules 
and the laws under the Real Estate Settlement Procedures Act that 
protects these rural borrowers and these small, high-risk loans that 
are in these communities that need a special kind of help.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself 30 seconds just to say we 
are losing a community bank or credit union a day in America, and we 
are losing them because they are drowning in a sea of Dodd-Frank 
regulations; and as they perish, so do the dreams of many of our 
constituents.
  Mr. Speaker, if a small community bank or credit union makes a loan 
and keeps it on their books, guess what. They want the loan repaid. 
They are going to make sure that the taxes are kept current. They are 
going to make sure the insurance is kept current. They don't need the 
burdensome regulation coming out from some Washington bureaucrat 
telling them how to do their business. They want to ensure the loan 
gets paid anyway.
  Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania 
(Mr. Rothfus), the vice chairman of the Financial Services Subcommittee 
on Financial Institutions and Consumer Credit.
  Mr. ROTHFUS. Mr. Speaker, I rise in support of H.R. 3971, the 
Community Institution Mortgage Relief Act, and I thank Representative 
Tenney for her hard work on this piece of legislation.
  At the Financial Institutions and Consumer Credit Subcommittee, we 
often talk about right-sizing regulations. If we want to have a robust 
financial system that balances smart

[[Page 19629]]

regulation and consumer protections with the need to make capital 
available to American consumers, we need to consider targeted 
opportunities to tailor requirements to fit the size and nature of the 
financial institution. Representative Tenney's legislation does just 
that.
  This Community Institution Mortgage Relief Act directs the CFPB to 
exempt creditors with $25 billion or less in assets from certain costly 
escrow and impound requirements on loans secured by a first lien on a 
consumer's principal dwelling. These requirements are especially 
burdensome for community financial institutions. They often force 
institutions to pass increased costs on to their consumers. This can 
drive business away from small banks and credit unions which are 
already suffering from overregulation and other economic challenges. As 
a result, in some cases, community financial institutions have exited 
the mortgage business altogether. This does not help consumers, and it 
further imperils our shrinking number of community banks and credit 
unions.
  This bill offers a targeted, reasonable fix so that these 
institutions can continue to serve their customers. This is smart. It 
is reasonable. It is common sense, particularly for those who 
understand how overregulation from Washington, D.C., has hurt consumer 
choice.
  I encourage my colleagues to support this legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Williams), a fellow Texan and a member of the Financial 
Services Committee.
  Mr. WILLIAMS. Mr. Speaker, I rise today in favor of H.R. 3971, the 
Community Institution Mortgage Relief Act of 2017.
  I would like to also thank the gentlewoman from New York (Ms. Tenney) 
for her hard work on this piece of legislation and her leadership on 
this issue.
  An overwhelming majority of my Financial Services Committee 
colleagues recognized the need for this bill, and I hope that the full 
House will also recognize that very same need by voting in favor of 
this meaningful legislation.
  Mr. Speaker, the problem right now is that community banks are being 
crushed by the sheer weight, magnitude, and intricacy of habitual 
Washington regulations, and this is all thanks to the crippling effects 
of the failed Dodd-Frank.
  Currently, community financial institutions are facing overly 
burdensome rules implemented by the CFPB. The fact of the matter is we 
need H.R. 3971 in order to provide needed regulatory relief to small 
financial institutions.
  By making two simple, minor changes, community financial institutions 
will be able to better serve their customers. To be clear, the 
institutions we are trying to help are not big banks, and they do not 
have the capabilities of the big banks.
  To comply with current burdensome escrow rules, community financial 
institutions must devote more resources, time, and employees to 
compliance, and thos costs get passed down to the consumer.
  Oftentimes, under the pressure of the current regulatory framework, 
these financial institutions will choose not to participate in the 
escrow market at all simply because the rules are financially and 
technically hindering. By directing the CFPB to provide relief, to 
lower the thresholds, we can help make things just a little bit easier 
on these vital community banks.
  Overall, we should not allow oppressive regulations to drive 
opportunity away from small servicers. Big banks and community 
financial institutions are not the same, and we should not treat them 
as such.
  As a small-business owner myself of over 44 years and a steadfast 
defender of Main Street, I do not hesitate to support this measure. It 
is good for this country. I see the need for the good people of central 
Texas to have more options.
  Our job here in Washington, many miles away from our communities and 
those we love, is to do what we can to make their lives easier. Mr. 
Speaker, H.R. 3971 makes life easier and takes a step in the direction 
of making America better.
  In God we trust. Merry Christmas.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  It is important to understand why we have a Consumer Financial 
Protection Bureau and why it is the centerpiece of the Dodd-Frank 
reforms.
  Prior to the Consumer Financial Protection Bureau, we did not have 
anybody looking out for consumers, and so that led us into the crisis 
that this country experienced in 2008 that took us into a recession and 
almost a depression.
  When I come before you with opposition to this kind of legislation, 
it is because I know and understand--and we should all understand--what 
we can do to protect our consumers and how we can work with community 
banks and what that means when we are talking about a bill like this, 
where real community banks of $2 billion or less are dealing with 
populations that I have alluded to over and over again in the 
presentation of my opposition to this bill: the rural communities and 
those communities that are underserved and where these are riskier 
loans and where they need not only the attention of the small community 
banks, but the servicers who service these loans, and knowing that the 
servicers who service a small number of loans can, in fact, pay the 
attention to them that is required by RESPA and make sure that the 
people are understanding, when there are transfers and they are in 
contact with them constantly--and this goes for everything from 
transfers to modifications--and how to deal with high-risk loans, who 
may need to modify those loans, who they would talk to, how they would 
talk to them.
  I want to tell you, if you expand this, and you have servicers that 
are handling 30,000 or more, these borrowers are not going to get this 
kind of attention. So these escrows that we are talking about are 
extremely important, and we should know exactly who we are protecting 
and who we are not protecting.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Kentucky (Mr. Barr), chairman of the Financial Services Subcommittee on 
Monetary Policy and Trade.
  Mr. BARR. Mr. Speaker, I thank Chairman Hensarling for his 
leadership, and especially a thank-you to the gentlewoman from New York 
(Ms. Tenney), my friend, for her outstanding leadership on this issue; 
and I rise in support of her legislation, the Community Institution 
Mortgage Relief Act.
  Homeownership is part of the American Dream; however, an ill-
conceived rule promulgated by the Consumer Financial Protection Bureau 
has made it harder for Americans to purchase a home.
  In typical one-size-fits-all Washington bureaucrat fashion, the 
Bureau's rule places excessive escrow and mortgage servicing 
requirements on the backs of smaller community financial institutions 
and mortgage servicers.
  What the Bureau missed is that these lenders are rarely in subprime 
lending and frequently hold the loan in portfolio for the term of the 
loan. This means these lenders have a very strong incentive to ensure 
that taxes and insurance premiums are being paid because they are 
taking on 100 percent of the downside risk if the borrower fails to 
hold up their side of the deal, and, therefore, an escrow account isn't 
necessary.
  However, as a direct result of the rule, there is less consumer 
choice and more expense. That is because many community financial 
institutions are leaving the market or have been forced to charge home 
buyers more so they can afford to hire the extra professional staff 
they need to comply with this rule.
  For these reasons, I support the Community Institution Mortgage 
Relief

[[Page 19630]]

Act, which exempts community financial institutions with assets of $25 
billion or less from much of the regulatory burden of the Bureau's 
rule.
  Again, I want to thank my good friend from New York, Congresswoman 
Claudia Tenney, and our chairman, Congressman Jeb Hensarling, for their 
leadership on this issue, and I urge my colleagues to vote for the 
Community Institution Mortgage Relief Act.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  I am paying special attention to this legislation, and I take pause 
when I see bills like H.R. 3971 that are just a small part of 
Republicans' relentless attack on the work of the Consumer Bureau.
  The Consumer Bureau's work on high-cost loans and consumer 
protections for them was well thought through and the result of careful 
research.
  Leading up to the 2008 financial crisis, many looking to fulfill the 
American Dream and purchase a house were convinced to take out higher 
cost loans without any regard for their ability to repay. They were 
sold false promises about the costs of their mortgage without adequate 
information and protections.
  The Consumer Bureau took years to talk to experts, hear from 
advocates, and do the research to come up with a strong rule to prevent 
those types of abuses from occurring again, while also providing 
regulatory relief to banks that serve rural and underserved 
communities. So let me take pause and, again, focus everyone on rural 
and underserved communities.
  I am oftentimes appalled by the fact that we have too many 
legislators who represent rural communities and underserved 
communities, but when it comes to looking out for their financial 
interests, they are not doing it. Yet they go back to these communities 
and they talk about all the other kinds of issues. They talk about 
people who are not saluting the flag properly. They will talk about 
freedom of choice issues, and they will rally folks around everything 
except their financial interests.

                              {time}  1300

  If rural communities are being hurt, oftentimes it is because the 
very people who say they represent them are not, indeed, representing 
them, and we can see this in this kind of discussion.
  So, again, we are focused on making sure that rural and underserved 
communities are served properly, that they are not thrown to the wolves 
and thrown into situations where they can't be paid attention to after 
they take out these loans.
  When they take out these loans, they need servicers who are trained, 
servicers who are committed, servicers who understand why rural and 
underserved communities need special protection, and who will work with 
them, who will contact them, who will work with them to work out 
situations where loan modifications may be required or requested.
  Mr. Speaker, I am going to continue to oppose. I understand that 
there are others who would like to open this up, and I reserve the 
balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentlewoman 
from Utah (Mrs. Love), an outstanding member of the Financial Services 
Committee.
  Mrs. LOVE. Mr. Speaker, I rise in support of H.R. 3971, the Community 
Institution Mortgage Relief Act, because the ability to purchase a home 
is one of the most sacred financial goals we have as Americans. This is 
an important path to home ownership, and we are doing everything we can 
to make sure it remains accessible.
  This bill will help do that by ensuring that community banks and 
credit unions stay in the mortgage lending business and continue to 
provide potential homeowners with diverse credit options in their 
communities.
  I would like to thank Representative Claudia Tenney from New York for 
providing such a great relief to community institutions.
  Unfortunately, as we have seen too often, this is one more instance 
where government efforts to protect people are inadvertently having the 
opposite effect. Though intended to protect homeowners, the CFPB's 
final rule and guidance on escrow and mortgage service requirements are 
so burdensome and costly for smaller institutions, that we are driving 
mortgage businesses away from them.
  This comes on top of an already burdensome regulatory environment in 
which our small financial institutions are facing rules and regulations 
that were made for larger banks, causing them to close their doors at a 
rate of one small institution a day.
  We need a more tailored regulatory environment that balances the 
credit needs of consumers with appropriate consumer protections. This 
legislation would do that by exempting lenders with assets of $20 
billion or less from escrow requirements on high-priced mortgage loans 
they hold in portfolio and would provide much-needed regulatory relief 
for small servicers.
  With smaller staff and fewer resources, existing escrow rules are 
financially and technically prohibitive for small community 
institutions. In addition, these smaller lenders often hold the 
liability in portfolio for the term of the loan, making an escrow 
account unnecessary, because the lender has a strong interest in 
protecting its collateral by ensuring that taxes and insurance premiums 
get paid.
  When it comes to purchasing or refinancing a home, it is tremendously 
important that consumers have credit options. We preserve those options 
by allowing community institutions to enter or remain in the mortgage 
market.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. HENSARLING. Mr. Speaker, I yield an additional 30 seconds to the 
gentlewoman from Utah.
  Mrs. LOVE. Mr. Speaker, the fact is, in my district, and in many 
other districts, there are small banks that are getting out of the 
mortgage lending business, and they cannot provide those options for 
the communities that they live in.
  We need to do everything we can to make sure that we are allowing 
these institutions to stay in the market without being deterred by the 
high cost of regulatory compliance, and thank goodness H.R. 3971 
achieves those goals. I support it.
  Ms. MAXINE WATERS of California. Mr. Speaker, may I inquire as to how 
much time I have left.
  The SPEAKER pro tempore (Mr. Rogers of Kentucky). The gentlewoman 
from California has 11\1/2\ minutes remaining.
  Ms. MAXINE WATERS. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, this bill is strongly opposed by all of the consumer 
groups: Americans for Financial Reform, Center for American Progress, 
Center for Responsible Lending, the National Consumer Law Center, and 
Public Citizen.
  Why are they so opposed to this bill? This bill would, again, amend 
the Truth in Lending Act--that is TILA--and the Real Estate Settlement 
Procedures Act--that is RESPA--to widen the size of two exemptions that 
the Consumer Financial Protection Bureau has already provided for 
smaller sized institutions on escrow accounts for higher priced 
mortgage loans and servicing requirements for small mortgage servicers.
  Under the bill, escrow accounts would no longer be required for 
riskier, high-priced loans at institutions with less than $25 billion 
in assets. Currently, the exemption applies to firms with less than $2 
billion in assets. The smaller service exception for increased 
notification requirements to consumers would be increased, again, from 
servicers with 5,000 loans to those with 30,000 loans.
  Why do all of these consumer groups oppose this legislation? Because 
it is obvious what is happening here. We are taking away the protection 
from those who need it the most. We are not doing anything for 
community banks. There are no $25 billion community banks.
  Mr. Speaker, I would ask that my colleagues in this House oppose this 
bill. It goes in the opposite direction of what we have done to try and 
give protection to those consumers who need

[[Page 19631]]

protection the most, and the Dodd-Frank reform has done this, and I 
would just ask opposition to this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from 
Tennessee (Mr. Duncan).
  Mr. DUNCAN of Tennessee. Mr. Speaker, I thank the gentleman for 
yielding me this time.
  Mr. Speaker, the gentlewoman from New York started this debate with 
an amazing statistic when she said that over 1,500 small banks and 
financial institutions have been forced to merge or be acquired or go 
out of business altogether since the passage of the Dodd-Frank bill.
  Those of us who opposed the Dodd-Frank bill at that time said this 
would happen, and that is exactly what happened. The big have gotten 
bigger.
  I read recently that the five largest Wall Street banks had 22 
percent of total deposits in this Nation before Dodd-Frank, but last 
year, when I read the update, they now have 44 percent of total 
deposits.
  There is a big government, big business duopoly that controls too 
much of the life of this country, and in every overregulated industry, 
it ends up being consolidated and controlled in the hands of a few big 
giants, and that is what has happened in this case.
  I remember when my wife and I bought our first house. We signed about 
two or three pages many years ago. Three and a half years ago, we 
bought a lake house, and we had to sign over 100 pages of documents 
that, being a lawyer and a judge, I knew that all it was was 
meaningless paperwork for bureaucrats and lawyers.
  This is important legislation. I have had many bankers across the 
State of Tennessee who have told me how harmful and how difficult it 
has been for the smaller institutions to comply with all the rules and 
regulations and red tape.
  Mr. Speaker, we need to pass this bill, and I urge its support.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, the Consumer Financial Protection Bureau's regulations 
address many questionable practices that contributed to the collapse of 
the housing market. Such practices were widespread in the mortgage 
servicing industry. The Bureau's servicing rules apply across the 
board, while providing a narrow exemption for small servicers.
  This exemption minimizes the regulatory compliance burden on small 
and community banks. Expanding current exemptions to larger 
institutions, however, just opens the door wide to abuses by larger 
banks primarily doing business not in the communities, the rural 
communities and the underserved communities, but outside of the 
communities where they are based, and by nonbanks, which still make 
most of the riskier subprime mortgage loans.
  Mr. Speaker, I continue to ask opposition to this legislation, and I 
reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Carolina (Mr. Budd), a very hardworking member of the Financial 
Services Committee.
  Mr. BUDD. Mr. Speaker, I thank the chairman for yielding me this 
time.
  Mr. Speaker, I rise today in support of the gentlewoman from New 
York's legislation, H.R. 3971, and I thank her for her leadership on 
this very important issue.
  As many of my friends here today know, Dodd-Frank and the Consumer 
Financial Protection Bureau have made life very difficult for many. 
Luckily, the Community Institution Mortgage Relief Act will, once 
again, solve a problem that they created, this time regarding escrow 
and mortgage servicing requirements.
  The CFPB rule regarding these accounts has done nothing more than 
accelerate industry consolidation in this space, particularly causing 
harm to rural consumers, leaving them with even less financing options.
  This bill reverses that problem, though, and will help bring local 
banks and financial institutions back into the picture. This bill 
simply lets them reenter the mortgage market and directs the CFPB to 
exempt them from the escrow account requirement of Dodd-Frank.
  Now, though this is a bipartisan bill, some of my friends on the 
other side of the aisle may claim that this bill removes consumer 
safeguards, but I would argue that this CFPB rule that they support 
creates an unnecessary burden on local banks and credit unions, which, 
in the end, hurts local communities and people that they claim to 
protect with this very rule.
  Mr. Speaker, I am glad this bill remains largely bipartisan and, as I 
said, returns power back to the community financial institutions and 
ensures that consumers have credit through various credit choices.
  I want to thank Representative Tenney for her steadfast leadership on 
this issue, and I urge adoption of her legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, may I inquire again as 
to how much time I have left.
  The SPEAKER pro tempore. The gentlewoman from California has 8\1/2\ 
minutes remaining.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself the 
balance of my time.
  Mr. Speaker, I want to move now to say a word about what my colleague 
is attempting to do. I appreciate my colleague from California (Mr. 
Sherman), who is going to offer an amendment that would lower the 
extremely high exemption thresholds in the underlying bill.
  I think that, having talked to him, I do understand that he believes 
that this is important to expand opportunity rather than to limit the 
ability for protection for certain of our consumers who come from these 
areas that I have described as rural and areas that are underserved.
  This amendment that he is going to present would allow creditors, 
again, with less than $10 billion in assets, to be exempted from escrow 
requirements on higher priced mortgage loans if they hold loans in 
portfolios for 3 years and allow servicers that service 20,000 loans or 
less to be exempted from enhanced consumer protection requirements 
under the Real Estate Settlement Procedures Act.
  His amendment changes it a little bit from $25 billion to $10 
billion, that is still too much, and from 30,000 loans or less to 
20,000 loans or less to be exempted from, again, enhanced consumer 
protection requirements under the Real Estate Settlement Procedures 
Act.
  Although I am pleased that this amendment would tighten up the 
language in the underlying bill somewhat, I remain concerned about the 
impacts it could have on many consumers. The bill is called the 
Community Institution Mortgage Relief Act of 2017, and the title 
implies that it will relieve our Nation's smaller financial 
institutions from regulatory burdens.
  Now, we all know that community banking is not purely a function of 
size, but when the Consumer Bureau conducted research for its escrow 
requirements rulemaking, it found that none of the entities it 
identified as operating predominantly in rural or underserved areas had 
total assets as of the end of 2009 greater than $2 billion.

                              {time}  1315

  And when the Consumer Bureau researched mortgage service and 
practices, it concluded: ``The problematic practices that have plagued 
the servicing industry, particularly in recent years, are, to a large 
extent, a function of a business model in which servicing is viewed as 
a discrete line of business and profit center.''
  However, they also found that approximately 96 percent of community 
bank and small credit union services that only purchase a hold, 
mortgage service, and rights for mortgage loans, they actually own or 
originate service 5,000 or fewer loans. Yet this amendment would exceed 
the Consumer Bureau's research base that sets that threshold by 
billions of dollars and its carefully researched loan service and 
threshold by 400 percent.
  So if the amendment is adopted, I must continue to oppose the bill 
because it would undermine the work of the Consumer Bureau and weaken 
consumer protections in homeownership.

[[Page 19632]]

Congress should not be complicit in these acts by passing legislation 
that further erodes the rights and protections of America's consumers. 
We must continue to do all that we can to ensure mortgage loan 
borrowers are fully aware of the terms and conditions of their mortgage 
loans and how much they will owe in obtaining these loans.
  If we are successful in convincing our colleagues today that they 
should not support this bill, I will be happy to work with my 
colleague, who I know has good intentions, to see what we can do to 
address what I think are some of his concerns. But for now, I must 
oppose the bill, and even with the amendment, it does not satisfy the 
concerns that I have addressed here. It does nothing to protect those 
in the rural communities and the underserved communities, and it does 
nothing to help community banks.
  So I am opposed both to the bill and to the amendment, and I ask for 
a ``no'' vote.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, may I inquire how much time I have 
remaining.
  The SPEAKER pro tempore. The gentleman from Texas has 7 minutes 
remaining.
  Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, I listened very carefully to my colleague, the ranking 
member, and I know how much respect she has--bordering, perhaps, on 
religious fealty--to the Consumer Financial Protection Bureau, and I 
must admit, now that it is being led by our former colleague Mick 
Mulvaney of South Carolina, I am taking a renewed interest in their 
actions and their pronouncements. I am just curious, as time goes by, 
whether the ranking member will continue to show such faith and 
confidence in that particular institution.
  Here is what we know, Mr. Speaker. All across America, we continue to 
lose one community bank or credit union a day. They are not perishing 
of natural causes. They are perishing from the sheer weight, volume, 
load, cost, complexity, and expense of the Dodd-Frank regulatory 
burden, of which this CFPB rule is just one aspect.
  Again, as my colleague, the chairman of the Financial Institutions 
and Consumer Credit Subcommittee--I believe it was he who pointed it 
out. There is not any one particular regulation that may cause the 
demise of these financial institutions, but it is the totality of them 
all. And as they perish, so perishes the American Dream of 
homeownership for so many of our constituents, particularly in rural 
areas like much of the Fifth District of Texas that I have the honor 
and pleasure of representing.
  Mr. Speaker, it is important that we save our community financial 
institutions. They play a vital role in our economy. It takes small 
banks and credit unions to fund our small businesses, which are the job 
engine of America. But again, they are being crushed by a regulatory 
burden.
  So I want to thank the gentlewoman from New York (Ms. Tenney) for 
bringing, again, just one needed, vital regulatory relief bill.
  Again, let's make sure, Mr. Speaker, everybody knows what this bill 
is talking about.
  Number one, already in current law, there is an exemption for small 
financial institutions dealing with having mortgage servicing and 
mortgage escrows. We are trying to bring it to a more reasonable level, 
an exemption that already exists. And I assume that the ranking member 
believes in the exemption or she would offer legislation to repeal it 
in total. So now we are debating how large this exemption ought to be.
  Given how many of our constituents still are in need of mortgage 
opportunities, given the demise of our community banks and credit 
unions, I think what we are trying to do here is most reasonable. Soon, 
the gentleman from California on the other side of the aisle, a 
respected Democratic member of the committee, will offer an amendment 
that I believe the sponsor of the legislation--I, myself, am willing to 
accept because we are trying to work on a bipartisan basis.
  There is a lot of bipartisan legislation that goes to the House 
Financial Services Committee. I wish the ranking member would 
participate in more of it, as she did last week. I am sorry she is 
losing out on this opportunity today, so I am happy to work with the 
gentleman from California on a bipartisan basis to get this legislation 
done.
  Another important note to be had, Mr. Speaker, is we get this 
implication from the ranking member that, oh, my Lord, if we pass this 
bill, H.R. 3971, all of a sudden, all consumer protection law 
disappears from the books. Well, I have got good news: it doesn't.
  After the passage of H.R. 3971, all of these mortgages will still be 
subject to the Equal Credit Opportunity Act; they will still be subject 
to regulation B; they will still be subject to the Fair Housing Act; 
they will still be subject to the Fair Credit Reporting Act; they will 
still be subject to the Home Mortgage Disclosure Act; they will still 
be subject to the Homeowners Protection Act; they will still be subject 
to the Real Estate Settlement Procedures Act.
  I have got a whole sheet here, Mr. Speaker.
  Again, that is a red herring. At the end of the day, this is about 
ensuring our constituents, particularly in rural areas, have access to 
mortgage credit and that community banks and credit unions that are 
absolutely suffering under the weight of the load aren't forced to 
escrow when they keep a mortgage on their books for 3 years. They are 
going to make sure the taxes are paid. They are going to make sure the 
insurance is paid. Instead, all that regulation does is burdens them 
and causes them to make fewer mortgage loans and, in some cases, no 
mortgage loans.
  So, again, I just want salute the gentlewoman from New York. I want 
to thank her for her leadership and what she is doing for her 
constituents in rural New York, and I urge everybody to adopt H.R. 
3971.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate on the bill has expired.


                 Amendment No. 1 Offered by Mr. Sherman

  Mr. SHERMAN. Mr. Speaker, I have an amendment at the desk.
  The SPEAKER pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 1, line 16, strike ``$25,000,000,000'' and insert 
     ``$10,000,000,000''.
       Page 2, line 20, strike ``30,000'' and insert ``20,000''.

  The SPEAKER pro tempore. Pursuant to House Resolution 647, the 
gentleman from California (Mr. Sherman) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from California.
  Mr. SHERMAN. Mr. Speaker, this bill began with a proposal by Mr. 
Luetkemeyer of Missouri two Congresses ago. Last Congress, I introduced 
it, and now the gentlewoman from New York is carrying the bill.
  Mr. Speaker, I wouldn't be here supporting this bill in any form if 
it undermined Dodd-Frank--I cosponsored Dodd-Frank--or if it undermined 
the CFPB, an institution that I think is very important and was created 
by Dodd-Frank.
  With the amendment that I am proposing, this bill goes back to the 
text that I introduced last year. That text came before the Financial 
Services Committee and secured the vote of all Republicans and 60 
percent of the Democrats. Now, you can't get all the votes all the 
time, but if you can get, for any particular draft, 100 percent of the 
Republicans and 60 percent of the Democrats on the committee, that, I 
think, is bipartisan legislation.
  Now, the first part of this bill and, by far, the most important part 
deals with loans made by small institutions that would otherwise be 
required to have an impound account. An impound account is when the 
bank collects from you not only your mortgage payment but collects, 
every month, some money toward your property taxes and toward your 
insurance, and then the bank pays those bills for you.
  Small institutions are not set up in order to keep track of how much 
property tax to collect and pay or fire and

[[Page 19633]]

other homeowners insurance. They would rather rely on the borrower, 
somebody they know, to pay their fire insurance, to pay their property 
taxes.
  Now, we can count on them to make sure that they are not giving this 
responsibility to somebody who can't handle it, because they are 
required, under this bill, to hold the mortgage for 3 years in their 
portfolio.
  Keep in mind that the whole requirement only relates to the first 5 
years. So here, they have to keep it in their portfolio for 3 years. 
This, I think, ensures that the bank or credit union or other small 
institution will make sure that the property taxes and property 
insurance are paid, while, at the same time, it won't take out of the 
market those small institutions that can't set up special impound 
accounts.
  A second part of this bill deals with simply telling the CFPB to make 
whatever adjustments it thinks are appropriate for small institutions 
with regard to the small servicer exemption. That leaves that authority 
with the CFPB. Under this amendment, the rule, whatever they decide to 
do for smaller institutions applies to those that are servicing not 
30,000, but only 20,000 total loans, because it makes sense to have 
different, less complicated rules for smaller servicers.
  So I don't think my amendment is sufficient to gain support for the 
bill from the ranking member. The bill in its amended form, it was 
sufficient to get 60 percent of the Democrats to vote for it in 
committee last year.
  Mr. Speaker, I want to thank the gentlewoman from New York for her 
work on this issue and what I understand is her support for this 
amendment, and I reserve the balance of my time.
  Ms. TENNEY. Mr. Speaker, I claim the time in opposition to the 
amendment, although I am not opposed.
  The SPEAKER pro tempore. Without objection, the gentlewoman from New 
York is recognized for 5 minutes.
  There was no objection.
  Ms. TENNEY. Mr. Speaker, I thank Chairman Hensarling, and I thank the 
gentleman from California for his amendment and work on this bill.
  I think this amendment is acceptable, and adopting it will still 
allow the bill to provide some regulatory relief to our small community 
banks and credit unions, and it will also assist in helping our low-
income borrowers in districts like mine, NY-22, where we have lost so 
many community banks. I think that this will help encourage lending and 
allow small community banks to again lend to people who are in lower 
income levels.
  I urge my colleagues to adopt the amendment, and I thank the 
gentleman again from California (Mr. Sherman), for his hard work on the 
bill and for this bipartisan effort.
  I yield back the balance of my time.
  Mr. SHERMAN. Mr. Speaker, seeing no further speakers, I yield back 
the balance of my time.
  The SPEAKER pro tempore. Pursuant to the rule, the previous question 
is ordered on the bill, as amended, and on the amendment offered by the 
gentleman from California (Mr. Sherman).
  The question is on the amendment offered by the gentleman from 
California (Mr. Sherman).
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.

                              {time}  1330


                           Motion to Recommit

  Ms. TITUS. Mr. Speaker, I have a motion to recommit at the desk.
  The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
  Ms. TITUS. I am opposed in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Ms. Titus moves to recommit the bill H.R. 3971 to the 
     Committee on Financial Services with instructions to report 
     the same back to the House forthwith with the following 
     amendment:
       Add at the end the following:

     SEC. 3. PROTECTING CONSUMERS FROM EXCESSIVE HOUSING COSTS AND 
                   PREDATORY LENDERS.

       (a) In General.--No creditor or servicer may make use of 
     the amendments made by this Act if the creditor or servicer 
     has either been--
       (1) found to have committed or engaged in an unfair, 
     deceptive, or abusive act or practice under Federal law in 
     connection with any transaction with a consumer for a 
     consumer financial product or service; or
       (2) convicted of fraud under Federal or State law in 
     connection with a residential mortgage loan.
       (b) Definitions.--For purposes of this section, the terms 
     ``State'' and ``consumer financial product or service'' have 
     the meaning given those terms, respectively, under section 
     1002 of the Dodd-Frank Wall Street Reform and Consumer 
     Protection Act.

  Ms. TITUS (during the reading). Mr. Speaker, I ask unanimous consent 
to dispense with the reading.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Nevada?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Nevada is recognized for 5 minutes in support of her motion.
  Ms. TITUS. Mr. Speaker, this is the final amendment to the bill. It 
will not kill the bill or send it back to committee. If adopted, the 
bill will immediately proceed to final passage, as amended.
  My motion to recommit is just a commonsense measure that I believe 
everybody in this House can support because it would prevent the bad 
actors from being able to use the exemptions in the underlying bill to 
dodge the consumer protections that are found in both the Truth in 
Lending Act and the Real Estate Settlement Procedures Act.
  My motion says if a lender has committed or engaged in an unfair, 
deceptive, or abusive act or practice under Federal law in connection 
with any transaction with a consumer for a financial product or 
service, or if they have been convicted of fraud under Federal or State 
law in connection with a residential mortgage loan, they cannot avail 
themselves of the bill's decreased requirements.
  As you know, Mr. Speaker, I represent the heart of the Las Vegas 
valley. More than 43 million visitors come to my district every year 
from all around the world to enjoy our first class resorts, hotels, 
entertainment, and the natural beauty around us. It is also, though, 
home to over 2 million people.
  Less than a decade ago, southern Nevada, unfortunately, had the 
additional distinction of being at the epicenter of the foreclosure 
crisis that was caused by the Great Recession. At its peak, nearly 70 
percent of all homes in the Las Vegas valley were under water, and the 
foreclosure rate was five times the national average. For 62 straight 
months, Nevada led the Nation in foreclosures and delinquent mortgages. 
This is the number--just think about this--219,000 foreclosures 
occurred during that period.
  Newspapers from coast to coast read like obituaries as home after 
home was boarded up, homelessness skyrocketed, and major developments 
along the Las Vegas strip that were under construction went belly-up, 
leaving high-rise rusting skeletons in the middle of the desert. We 
lost 80,000 construction jobs during that period.
  We were one of the first States to be hit so hard by the recession 
and one of the last States to recover. But housing prices are coming 
back and new construction is taking place.
  Unfortunately, it seems that my colleagues on the other side of the 
aisle want to turn back the clock and go back to the abusive practices, 
including predatory lending, that contributed to the Great Recession.
  Supporters of this legislation--you have heard them--say it is needed 
to provide relief for smaller sized institutions and smaller sized 
mortgage servicers. But that is really the red herring here. The CFPB 
has already, as you heard too, provided a targeted exemption to cover 
those folks.
  This bill is really about protecting the large servicers that failed 
to provide necessary loan documentation and to communicate openly with 
their customers, in turn contributing to millions of unnecessary 
disclosures and

[[Page 19634]]

settlements for abusive business practices during the financial crisis.
  Nevada, in fact, had to bring lawsuits against financial institutions 
like Countrywide and Bank of America that engaged in this predatory 
lending.
  My motion to recommit would ensure that such lending practices and 
loan servicing activities cannot resurface at the expense of consumers.
  This is especially important also in light of the fact that at the 
same time we are eroding consumer protections put in place after the 
financial crisis, my Republican colleagues are also simultaneously 
taking away affordable housing from my constituents. The ``Job Cuts and 
Tax Act'' passed by this House eliminates tax-exempt private activity 
bonds, a move that will stifle investments in affordable housing.
  The Nevada Housing Division, for example, has already suspended its 
mortgage credit certificate program which provides an average of $2,000 
a year in Federal income tax savings to first-time home buyers and 
veterans because of the threat of this provision.
  Furthermore, multifamily housing bonds make affordable housing 
possible for seniors, people with disabilities, veterans, and low-
income families. Without the tax exemption on these bonds, Nevada can 
lose up to 7,000 rental homes.
  So, Mr. Speaker, I ask you: How can this body pass a bill that 
eliminates affordable rental homes; makes ownership more expensive for 
first-time home buyers; and opens the door, again, to predatory lending 
practices that target low-income borrowers and put them at risk of 
foreclosure?
  This mix of anticonsumer and antiaffordable housing policies does not 
bode well for a country that suffered a housing crisis just a decade 
ago, so I would urge my colleagues to vote in favor of this motion to 
recommit.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I claim time in opposition.
  The SPEAKER pro tempore. The gentleman from Texas is recognized for 5 
minutes.
  Mr. HENSARLING. Mr. Speaker, I am looking at this motion to recommit, 
and, on its best day, it may be superfluous and redundant; and on its 
worst day, it may be confusing. But I fear, in many respects, it is 
just a smokescreen to give many of my friends on the other side of the 
aisle an excuse not to vote for the underlying legislation, H.R. 3971.
  Already the CFPB has full UDAAP authority to deal with unfair, 
deceptive, and abusive acts. That already exists. So this is a red 
herring that somehow people are using the lack of the passage of the 
MTR as a rationale not to support H.R. 3971, which is vitally needed 
for so many of our community financial institutions to be able to make 
home mortgage loans to hardworking Americans who deserve their chance 
at the American Dream.
  Again, as I said earlier during this debate, Mr. Speaker, all of 
these mortgages continue to be subject to the Equal Credit Opportunity 
Act, the Fair Housing Act, the Fair Credit Reporting Act, the Home 
Mortgage Disclosure Act, the Homeownership Counseling Act, the 
Homeowners Protection Act, the Real Estate Settlement Procedures Act, 
the Secure and Fair Enforcement for Mortgage Licensing Act, the Truth 
in Lending Act, Regulation Z, and the list goes on and on and on.
  That is simply an excuse. The MTR is an excuse not to save our 
struggling community banks and our citizens in rural America who 
deserve the services of these community banks and credit unions.
  Again, on its best day, it is superfluous and redundant. On its worst 
day, it is introducing confusing language into an already settled area 
of the law for consumer protection.
  Mr. Speaker, I urge all Members to reject the motion to recommit, and 
I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Ms. TITUS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

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