Posted on Thursday, November 11, 2010
The Mortgage Bankers Association sent a letter along with six other industry trade groups to Federal Reserve Chairman Ben Bernanke on Monday.
Washington, D.C.-based MBA and the other groups are concerned that the Fed, which has jurisdiction over the Truth in Lending Act (TILA), and HUD, which oversees the Real Estate Settlement Procedures Act (RESPA), will create regulatory rules that overlap and cause issues. Both of these acts have the potential to clash with each other and with the Dodd-Frank Act.
The Dodd-Frank Act created the Consumer Financial Protection Bureau, which will be overseen by yet another agency, the Treasury Department.
For this reason, the groups sent a letter asking Bernanke to work with other administration officials like Treasury Secretary Tim Geithner and CFPB special advisor Elizabeth Warren to find ways to improve consumer disclosures under TILA and the RESPA.
“Major changes under TILA, the Home Ownership and Equity Protection Act and concerning loan officer compensation along with the new RESPA, SAFE appraisal standard revisions, to name a few, have stretched compliance capabilities in institutions thin, increased costs
and, if not coordinated going forward, risk threatening the availability of sound hosing finance options,” the letter read.
It continued, “Likewise, these initiatives have stretched the abilities of stakeholders to consider proposals and provide needed input.”
The letter asks that all of the groups develop a plan for disclosure that includes an agenda that covers all areas of disclosure.
“The plan should establish RESPA-TIL integration as a first priority and assure that other rules to improve disclosures complement that effort,” the letter stated.
It went on, “Accordingly, we believe efforts of individual agencies, including the Board’s to improve TILA disclosures, at this point, should be rescheduled later in the process, to avoid diverting the efforts of stakeholders into what may become a fruitless pursuit and/or confusing the joint RESPA-TILA simplification effort itself.”
The letter stated that the CFPB was established to put consumer financial protection efforts under one roof, and that in the past years the Fed and HUD have unintentionally created a set of laws that are separate and confusing.
It continued, “All legislative proposals in this area should be part of the plan and coordinated as well. Moreover, to maximize public involvement, we believe the plan should be made public so stakeholders can appropriately allocate their resources.”
The other organizations that took part in sending the letter are: the American Bankers Association; the American Financial Services Association; the Community Mortgage Banking Project; the Consumer Bankers of America; the Consumer Mortgage Coalition; and the Independent Community Bankers of America.
Joy Leopold 11/09/2010