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House Passes Bill with TILA, RESPA Regulatory Relief
Thursday, December 14, 2017 6:45 AM

The House voted 294-129 Tuesday in favor of a bill that would provide mortgage-related regulatory relief. The Community Institution Mortgage Relief Act of 2017 (H.R. 3971) was introduced in October by Rep. Claudia Tenney (R-N.Y.).

Existing escrow rules are financially and technically prohibitive for the smaller staff and resources of community institutions. Many credit unions lack the resources to create and maintain escrow accounts in house, and alternatively outsourcing the work can be cost prohibitive. The burdensome and expensive escrow requirements force small lenders to increase costs for consumers or out of the mortgage market altogether.

Specifically, the Community Institution Mortgage Relief Act of 2017 would exempt:

  • Mortgage loans made by financial institutions under $10 billion in assets from the Truth in Lending Act’s escrow requirements; and
  • Mortgage servicers that service fewer than 20,000 mortgages annually from the requirements of Section 6 of the Real Estate Settlement Procedures Act.

The bill’s cosponsors include Reps. Brad Sherman (D-Calif.), Roger Williams (R-Texas), David Loebsack (D-Iowa), and Pete Sessions (R-Texas).

“H.R. 3971 is a common-sense piece of regulatory reform legislation that makes changes to the Truth in Lending Act and the Real Estate Settlement Procedures Act,” said CUNA Chief Advocacy Officer Ryan Donovan.

"These important fixes will give smaller credit unions and community banks greater flexibility to ensure that more of their members and customers can get a loan to buy a home and stay in their homes," said House Financial Services Committee Chairman Jeb Hensarling (R-Texas).