A housing finance reform bill that would wind down Fannie Mae and Freddie Mac also contains a number of regulatory relief provisions, including tweaks to the CFPB’s Qualified Mortgage rule and exam reform.
For example, Title IV of the Protecting American Taxpayers and Homeowners Act includes a section that would exclude a number of items from the qualified mortgage 3% cap on points and fees that make compliance unprofitable for some credit unions.
Title charges, loan officer compensation, escrow charges for taxes and insurance, lender-paid compensation to a correspondent bank, credit union or mortgage brokerage firm, and loan-level price adjustments charged by Fannie or Freddie to offset risk factors would all be excluded from the cap under the bill.
The bill would also permit 40-year mortgages to qualify as qualified mortgages, waive some mortgage disclosure requirements and delay implementation of CFPB mortgage rules, scheduled to take effect in January 2014, for an additional year.
Also of interest to credit unions is a provision that incorporates the Financial Institutions Examination Fairness and Reform Act, which would establish an ombudsman outside of the NCUA to handle exam appeals, require that examiners provide credit unions with documentation to support exam exception write-ups, and codify examinations standards.
The bill, which was unveiled July 11 by GOP leadership, would also delay implementation of Basel III capital standards for banks.
CUNA Senior Vice President of Legislative Affairs Ryan Donovan said he’s pleased the bill takes a broader approach to reform than just the reform for Fannie Mae and Freddie Mac.
He added that he’s not surprised to see the additional regulatory relief provisions in the bill, because the issues have been raised during previous House Financial Services Committee hearings on housing finance reform.
The bill will be the subject of a Thursday hearing before the entire committee. Janice Sheppard, senior vice president of mortgage lending and compliance for the $283 million Southwest Airlines FCU, is scheduled to testify on behalf of NAFCU.