3/9: Senate Banking & Mortgage Deregulation
Provisions in S. 2155 would weaken important consumer protections, undermine the independence of the CFPB as our nation’s chief consumer protection watchdog, and go well beyond the bill’s stated purpose of providing regulatory relief to small financial institutions.
SENATE BILL # S. 2155
SUGGESTED MEMBER CALLING SCRIPT:
“Hi, my name is ____, I’m a constituent from _[TOWN]___ zip code 81***. I’m calling to let Senator Bennet/Gardner know that I do NOT support Senate Bill 2155 and I’m asking you to VOTE NO. I do NOT support deregulation for some of the same banks that helped cause the 2008 financial disaster. This bill would pave the way for another financial crisis. Thank you.
WHO MEMBER IS TO CONTACT:
- Senator Michael Bennet
- Senator Cory Gardner
WHY THIS IS IMPORTANT: Provisions in S. 2155 would weaken important consumer protections, undermine the independence of the CFPB as our nation’s chief consumer protection watchdog, and go well beyond the bill’s stated purpose of providing regulatory relief to small financial institutions. For example:
Section 101 expands an exemption from the CFPB’s “qualified mortgage” rule for truly small lenders that hold loans in portfolio, applying it to institutions holding up to $10 billion in assets;
Section 103 exempts lenders from appraisal requirements for many rural loans when the loan is below $400,000 in home value, eliminating a vital protection for buyers and lenders alike;
Section 107 exempts manufactured-home retailers and their employees from anti-steering protections that apply to other mortgage originators (loan officers and mortgage brokers), and replaces them with substantially weaker protections;
Section 109 expands an exemption that allows lenders to avoid escrowing taxes and insurance for many higher-cost, higher-risk loans, making it less likely that borrowers will be able to meet recurring costs of homeownership; and additional information: Section 110 eliminates the requirement of a three-day wait period on mortgage disclosures in cases where the lender offers a new interest rate, giving borrowers less time to examine whether other loan terms have also been changed in the process.
- CBO estimates that enacting the bill would increase federal deficits by $671 million over the 2018-2027 period
- Bill amends the Truth in Lending Act to allow institutions with less than $10 billion in assets to waive ability-to-repay requirements for certain residential-mortgage loans.
- Bill amends the Bank Holding Company Act of 1956 to exempt banks with assets valued at less than $10 billion from the “Volcker Rule,” which prohibits banking agencies from engaging in proprietary trading or entering into certain relationships with hedge funds and private-equity funds.
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