[House Report 115-806]
[From the U.S. Government Publishing Office]


115th Congress   }                                      {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                      {     115-806

======================================================================



 
              BUILDING UP INDEPENDENT LIVES AND DREAMS ACT

                                _______
                                

 July 10, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5953]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 5953) to provide regulatory relief to charitable 
organizations that provide housing assistance, and for other 
purposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                          Purpose and Summary

    Introduced by Representative Barry Loudermilk on May 24, 
2018, H.R. 5953, the ``Building Up Independent Lives and Dreams 
Act'' or the ``BUILD Act'' amends the Truth in Lending Act 
(TILA) and Real Estate Settlement Procedures Act (RESPA) to 
allow bona-fide nonprofit organizations--that are eligible for 
tax-exempt charitable donations and are making zero percent 
interest mortgage loans--to choose whether to use the truth in 
lending (TIL), good faith estimate (GFE), and HUD-1 forms in 
place of the TILA-RESPA Integrated Disclosure (TRID) form 
established under the Dodd-Frank Wall Street Reform and 
Consumer Protection Act.

                  Background and Need for Legislation

    On November 20, 2013, the Bureau of Consumer Financial 
Protection (Bureau) issued the TILA-RESPA Integrated Disclosure 
(TRID) Final Rule that requires mortgage lenders to use more 
easily understood and streamlined mortgage disclosure forms. 
The TRID Rule applies to most closed-end consumer mortgages. It 
does not apply to home equity lines of credit (HELOCs), reverse 
mortgages, or mortgages secured by a mobile home or by a 
dwelling that is not attached to real property. It also does 
not generally apply to loans made by persons who are not 
considered ``creditors'' under TILA. The TRID Rule became 
effective for mortgage applications received on or after 
October 3, 2015.
    Before the TRID Rule, both TILA and RESPA required lenders 
to provide consumers disclosures about the estimated and actual 
real estate settlement costs and financial terms of the 
mortgages they offer. Among other requirements, RESPA requires 
standardized disclosures such as a Good Faith Estimate of the 
costs that borrowers should expect to pay at closing, and a 
list of closing costs, commonly known as the HUD-1 document. 
TILA requires lenders to disclose the cost of credit and the 
repayment terms of mortgage loans before borrowers enter 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 they are 
offered.
    However, Title X of the Dodd-Frank Act required the Bureau 
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'' that remains 
compliant with both TILA and RESPA. The final TRID forms thus 
combined elements of the Good Faith Estimate, the HUD-1, and 
the TILA Disclosure.
    And while the Bureau designed these forms to be more 
consumer friendly, the forms include sections on balloon loans 
and adjustable rate mortgages that may be applicable to 
traditional mortgage lenders, but are not relevant to 
charitable organizations like Habitat for Humanity.
    Additionally, the TRID integrated disclosure forms pose 
significant implementation and compliance challenges for 
charitable organizations because they include difficult-to-
understand timing and delivery requirements and other practical 
implementation issues that go beyond the previous content 
requirements. The TRID Rule would require charities and other 
non-profit entities to purchase costly and complex software and 
then train their staff to use the software, which would divert 
resources from the charitable organization's purpose, which the 
Bureau intended for traditional mortgage lenders. As such, many 
charitable organizations have difficulty with fulfilling the 
needed compliance related to origination and servicing of their 
loans.

                                Hearings

    The Committee did not hold hearings to examine matters 
related to H.R. 5953.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
June 14, 2018, and ordered H.R. 5953 to be reported favorably 
by a recorded vote of 53 yeas to 0 nays (Record vote no. FC-
168), a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 53 yeas to 0 nays 
(Record vote no. FC-186), a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 5953 
will reduce regulatory burden on charitable housing 
organizations by permitting them to choose whether to use the 
TIL, GFE, and HUD-1 mortgage disclosure forms instead of the 
TRID forms.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 10, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5953, the BUILD 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 5953--BUILD Act

    Under current law, the Consumer Financial Protection Bureau 
(CFPB) requires mortgage lenders to disclose certain 
information regarding the terms and costs of home loans to 
consumers at the beginning and closing of mortgage 
transactions. H.R. 5953 would allow lenders offering 
residential mortgages to tax-exempt organizations at a zero 
percent interest rate to satisfy those disclosure requirements 
by instead filing three different disclosure forms if the loan 
is primarily for charitable purposes. The information on those 
three forms is generally included in the disclosures required 
under current law.
    Using information from the CFPB, CBO estimates that 
enacting H.R. 5953 would increase direct spending by less than 
$500,000 for the agency to issue a rule to implement the 
changes to the disclosure requirements.
    Because enacting H.R. 5953 would affect direct spending, 
pay-as-you-go procedures apply. Enacting the bill would not 
affect revenues.
    CBO estimates that enacting H.R. 5953 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    H.R. 5953 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: The Committee estimates that the bill requires one 
directed rulemaking within the meaning of such section. This 
directed rulemaking will ensure that the CFPB revises the TILA 
RESPA Rule to exempt non-profit tax exempt organizations from 
TRID requirements.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 5953 as the ``Building Up 
Independent Lives and Dreams Act or the ``BUILD Act''.

Section 2. Mortgage loan transaction disclosure requirements

    This section amends Section 105 of the Truth in Lending Act 
and Section 4 of the Real Estate Settlement Procedures Act to 
allow non-profit entities which are eligible to receive tax-
exempt charitable contributions and are making zero percent 
interest mortgage loans to choose whether to use the TIL, HUD-
1, and GFE mortgage disclosure forms in lieu of the TILA RESPA 
Integrated Disclosures forms.
    This section also requires the Director of the Bureau of 
Consumer Financial Protection to issue regulations within 180 
days of enactment as may be necessary to implement changes to 
the Truth in Lending Act and Real Estate Settlement Procedures 
Act. Finally, this section specifies that the option provided 
in Section 2(a) and 2(b) shall take effect on the date of 
enactment.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                          TRUTH IN LENDING ACT




           *       *       *       *       *       *       *
TITLE I--CONSUMER CREDIT COST DISCLOSURE

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CHAPTER 1--GENERAL PROVISIONS

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Sec. 105. Regulations

  (a) The Bureau shall prescribe regulations to carry out the 
purposes of this title. Except with respect to the provisions 
of section 129 that apply to a mortgage referred to in section 
103(aa), such regulations may contain such additional 
requirements, classifications, differentiations, or other 
provisions, and may provide for such adjustments and exceptions 
for all or any class of transactions, as in the judgment of the 
Bureau are necessary or proper to effectuate the purposes of 
this title, to prevent circumvention or evasion thereof, or to 
facilitate compliance therewith.
  (b) The Bureau shall publish a single, integrated disclosure 
for mortgage loan transactions (including real estate 
settlement cost statements) which includes the disclosure 
requirements of this title in conjunction with the disclosure 
requirements of the Real Estate Settlement Procedures Act of 
1974 that, taken together, may apply to a transaction that is 
subject to both or either provisions of law. The purpose of 
such model disclosure shall be to facilitate compliance with 
the disclosure requirements of this title and the Real Estate 
Settlement Procedures Act of 1974, and to aid the borrower or 
lessee in understanding the transaction by utilizing readily 
understandable language to simplify the technical nature of the 
disclosures. In devising such forms, the Bureau shall consider 
the use by creditors or lessors of data processing or similar 
automated equipment. Nothing in this title may be construed to 
require a creditor or lessor to use any such model form or 
clause prescribed by the Bureau under this section. A creditor 
or lessor shall be deemed to be in compliance with the 
disclosure provisions of this title with respect to other than 
numerical disclosures if the creditor or lessor (1) uses any 
appropriate model form or clause as published by the Bureau, or 
(2) uses any such model form or clause and changes it by (A) 
deleting any information which is not required by this title, 
or (B) rearranging the format, if in making such deletion or 
rearranging the format, the creditor or lessor does not affect 
the substance, clarity, or meaningful sequence of the 
disclosure.
  (c) Model disclosure forms and clauses shall be adopted by 
the Bureau after notice duly given in the Federal Register and 
an opportunity for public comment in accordance with section 
553 of title 5, United States Code.
  (d) Any regulation of the Bureau, or any amendment or 
interpretation thereof, requiring any disclosure which differs 
from the disclosures previously required by this chapter, 
chapter 4, or chapter 5, or by any regulation of the Bureau 
promulgated thereunder shall have an effective date of that 
October 1 which follows by at least six months the date of 
promulgation, except that the Bureau may at its discretion take 
interim action by regulation, amendment, or interpretation to 
lengthen the period of time permitted for creditors or lessors 
to adjust their forms to accommodate new requirements or 
shorten the length of time for creditors or lessors to make 
such adjustments when it makes a specific finding that such 
action is necessary to comply with the findings of a court or 
to prevent unfair or deceptive disclosure practices. 
Notwithstanding the previous sentence, any creditor or lessor 
may comply with any such newly promulgated disclosure 
requirements prior to the effective date of the requirements.
  (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).
  (f) Exemption Authority.--
          (1) In general.--The Bureau may exempt, by 
        regulation, from all or part of this title all or any 
        class of transactions, other than transactions 
        involving any mortgage described in section 103(aa), 
        for which, in the determination of the Bureau, coverage 
        under all or part of this title does not provide a 
        meaningful benefit to consumers in the form of useful 
        information or protection.
          (2) Factors for consideration.--In determining which 
        classes of transactions to exempt in whole or in part 
        under paragraph (1), the Bureau shall consider the 
        following factors and publish its rationale at the time 
        a proposed exemption is published for comment:
                  (A) The amount of the loan and whether the 
                disclosures, right of rescission, and other 
                provisions provide a benefit to the consumers 
                who are parties to such transactions, as 
                determined by the Bureau.
                  (B) The extent to which the requirements of 
                this title complicate, hinder, or make more 
                expensive the credit process for the class of 
                transactions.
                  (C) The status of the borrower, including--
                          (i) any related financial 
                        arrangements of the borrower, as 
                        determined by the Bureau;
                          (ii) the financial sophistication of 
                        the borrower relative to the type of 
                        transaction; and
                          (iii) the importance to the borrower 
                        of the credit, related supporting 
                        property, and coverage under this 
                        title, as determined by the Bureau;
                  (D) whether the loan is secured by the 
                principal residence of the consumer; and
                  (E) whether the goal of consumer protection 
                would be undermined by such an exemption.
  (g) Waiver for Certain Borrowers.--
          (1) In general.--The Bureau, by regulation, may 
        exempt from the requirements of this title certain 
        credit transactions if--
                  (A) the transaction involves a consumer--
                          (i) with an annual earned income of 
                        more than $200,000; or
                          (ii) having net assets in excess of 
                        $1,000,000 at the time of the 
                        transaction; and
                  (B) a waiver that is handwritten, signed, and 
                dated by the consumer is first obtained from 
                the consumer.
          (2) Adjustments by the board.--The Bureau, at its 
        discretion, may adjust the annual earned income and net 
        asset requirements of paragraph (1) for inflation.
                  
                          (i) Authority of the board to 
                        prescribe rules.--Notwithstanding 
                        subsection (a), the Board shall have 
                        authority to prescribe rules under this 
                        title with respect to a person 
                        described in section 1029(a) of the 
                        Consumer Financial Protection Act of 
                        2010. Regulations prescribed under this 
                        subsection may contain such 
                        classifications, differentiations, or 
                        other provisions, as in the judgment of 
                        the Board are necessary or proper to 
                        effectuate the purposes of this title, 
                        to prevent circumvention or evasion 
                        thereof, or to facilitate compliance 
                        therewith.
  (h) Deference.--Notwithstanding any power granted to any 
Federal agency under this title, the deference that a court 
affords to the Bureau with respect to a determination made by 
the Bureau relating to the meaning or interpretation of any 
provision of this title, other than section 129E or 129H, shall 
be applied as if the Bureau were the only agency authorized to 
apply, enforce, interpret, or administer the provisions of this 
title.

           *       *       *       *       *       *       *

                              ----------                              


             REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974



           *       *       *       *       *       *       *
                      uniform settlement statement

  Sec. 4. (a) The Bureau shall publish a single, integrated 
disclosure for mortgage loan transactions (including real 
estate settlement cost statements) which includes the 
disclosure requirements of this section and section 5, in 
conjunction with the disclosure requirements of the Truth in 
Lending Act that, taken together, may apply to a transaction 
that is subject to both or either provisions of law. The 
purpose of such model disclosure shall be to facilitate 
compliance with the disclosure requirements of this title and 
the Truth in Lending Act, and to aid the borrower or lessee in 
understanding the transaction by utilizing readily 
understandable language to simplify the technical nature of the 
disclosures. Such forms shall conspicuously and clearly itemize 
all charges imposed upon the borrower and all charges imposed 
upon the seller in connection with the settlement and shall 
indicate whether any title insurance premium included in such 
charges covers or insures the lender's interest in the 
property, the borrower's interest, or both. The Bureau may, by 
regulation, permit the deletion from the forms prescribed under 
this section of items which are not, under local laws or 
customs, applicable in any locality, except that such 
regulation shall require that the numerical code prescribed by 
the Bureau be retained in forms to be used in all localities. 
Nothing in this section may be construed to require that that 
part of the standard forms which relates to the borrower's 
transaction to be furnished to the seller, or to require that 
that part of the standard forms which relates to the seller be 
furnished to the borrower.
  (b) The forms prescribed under this section shall be 
completed and made available for inspection by the borrower at 
or before settlement by the person conducting the settlement, 
except that (1) the Bureau may exempt from the requirements of 
this section settlements occurring in localities where the 
final settlement statement is not customarily provided at or 
before the date of settlement, or settlements where such 
requirements are impractical and (2) the borrower may, in 
accordance with regulations of the Bureau, waive his right to 
have the forms made available at such time. Upon the request of 
the borrower to inspect the forms prescribed under this section 
during the business day immediately preceding the day of 
settlement, the person who will conduct the settlement shall 
permit the borrower to inspect those items which are known to 
such person during such preceding day.
  (c) The standard form described in subsection (a) may 
include, in the case of an appraisal coordinated by an 
appraisal management company (as such term is defined in 
section 1121(11) of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(11))), a 
clear disclosure of--
          (1) the fee paid directly to the appraiser by such 
        company; and
          (2) the administration fee charged by such company.
  (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).

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