WASHINGTON—America’s Credit Unions joined four major financial trade groups in urging the Consumer Financial Protection Bureau to move quickly on targeted mortgage regulatory relief tied to President Trump’s March executive order aimed at expanding access to mortgage credit.
In a May 15 letter to CFPB Acting Director Russell Vought, the groups said a number of Dodd-Frank-era mortgage regulations have increased origination and servicing costs “without providing commensurate consumer benefit,” and called on the Bureau to prioritize reforms that could reduce costs and ease operational burdens for community banks and credit unions.
Joining America’s Credit Unions on the letter were the American Bankers Association, Consumer Bankers Association, Housing Policy Council and Mortgage Bankers Association.
The letter responds to President Trump’s March 13 executive order, “Promoting Access to Mortgage Credit,” which directed the CFPB to modernize Home Mortgage Disclosure Act reporting requirements and consider reforms to Ability-to-Repay and Qualified Mortgage rules. The organizations said they support the Administration’s effort to reduce what they described as unnecessary regulatory complexity while promoting affordable and sustainable homeownership.
Among the key recommendations was a request to modernize loan originator compensation rules under Regulation Z. The groups argued current restrictions limit competition and flexibility, and asked the CFPB to allow loan originators to reduce compensation to compete for borrowers and permit lenders to lower compensation in cases involving significant origination errors, where consistent with wage and hour laws.
The trades also called on the Bureau to reform TRID disclosure tolerances, cure provisions and timing requirements, saying the current framework creates operational complexity and regulatory uncertainty that increase compliance costs for lenders while offering limited additional consumer benefit.
In addition, the organizations urged the CFPB to update HMDA reporting thresholds and revise the definition of “financial institution” under Regulation C to better reflect the Administration’s stated focus on community institutions and smaller lenders. They said updated thresholds could reduce technology, staffing and operational costs associated with HMDA compliance for credit unions and community banks.