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H.R. 1264, Reg Relief Bills Heard in House Financial Services Committee
Thursday, January 11, 2018 6:30 AM

The Subcommittee on Financial Institutions and Consumer Credit held a legislative hearing on proposed regulatory reform legislation Tuesday.

Witnesses before the Subcommittee were E.J. Gleim, executive vice president and chief operating officer, Triad Financial Services, on behalf of the Manufactured Housing Institute; Robert Fisher, president and chief executive officer, Tioga State Bank, on behalf of the Independent Community Bankers of America; Scott B. Astrada, director of federal advocacy, Center for Responsible Lending; and Matthew J. Shuman, director, legislative division, The American Legion.

Chair Blaine Luetkemeyer stated the subcommittee’s goal is improving consumers’ access to affordable financial products and protecting the integrity of the financial system. Banks and credit unions need relief from unnecessarily stringent regulatory requirements.

Legislation under review was H.R. 1264, the Community Financial Institution Exemption Act, by Rep. Roger Williams (R-Texas); H.R. 4725, the Community Bank Reporting Relief Act; H.R. 4648, the Home Mortgage Reporting Relief Act of 2017, a bill to amend the Truth in Lending Act to clarify the exclusion for seller-financers from the definition of mortgage originator; and H.R. 2683, the Protecting Veterans Credit Act of 2017.

Williams, calling community banks and credit unions the backbone of the American financial system, says his bill will put the burden of proof on the CFPB to justify new regulations and could have a tremendous impact on Main Street. Community banker Robert Fisher supports Williams’ bill, noting that the financial industry is losing a community bank or credit union for every working day. Rep. Robert Pittenger (R-N.C.) said his district has lost 50 percent of its banks since 2008.

Gleim, representing the manufactured housing industry, would like to see non-depository institutions included in H.R. 1264 to have an even playing field with financial institutions. He said lenders for manufactured housing face the same high compliance costs and service a market that few other lenders serve. Consumers have a hard time getting small loans for manufactured homes, restricting access to affordable housing.

Rep. Lacy Clay (D-Mo.) suggested that Congress may have over-reached when creating the CFPB and that its role could be to focus on the big players rather than everyone. Rep. Carolyn Maloney (D-N.Y.) asked why any consumer should have less protection based on the size of their financial institution.

Fisher supports H.R. 4725 that allows for a reduced call report. The current call report requires a lot of time to prepare but is of limited use to examiners to determine safety and soundness. The call report he must file has grown from 18 to 53 pages, while his business model has remained the same. Gleim told the committee that the software for HMDA is extremely expensive, and extensive data reporting creates privacy and ID theft issues.

H.R. 4648 provides a one-year safe harbor for financial institutions from having to comply with the data collection and reporting requirements. Astrada, representing the Center for Responsible Lending, does not support the bill, believing that making the mortgage data public protects anti-discrimination efforts. Rep. Al Green (D-Texas) expressed similar concerns.

Shuman, director of the American Legion, spoke in favor of H.R. 2683, the Protecting Veterans Credit Act of 2017, which had bi-partisan support of many of the committee members and the witness panel. The bill will protect veterans’ credit ratings from disputed medical debts and establishes a dispute process.

For more information, please contact Texas Credit Union Association President Jeff Huffman at 469-385-6488 or jhuffman@txcua.coop.