MBA Voices ‘Serious Concerns’ Over Consumer Financial Protection Bill
- Oct 23, 2009
Washington, D.C.—The Mortgage Bankers Association (MBA) said it has “serious concerns” with the legislation passed by the House Financial Services Committee that would create a consumer financial protection agency.
MBA wants a national consumer financial protection agency, rather than have the standards governed by states and localities, which it said would lead to increased costs for consumers and present implementation challenges for lenders who operate across different states.
“For a number of years, MBA has been out front calling for tough, uniform national lending standards to protect consumers. Earlier this year, we came forth with our own proposal that would close the regulatory gaps by establishing a federal regulator for independent mortgage banks,” said MBA Chairman, Robert E. Story, Jr. in a statement.
“We regret that the committee rejected an approach that would have ensured that the consumer protections contained within the bill, and those implemented by the CFPA, would be a uniform national standard that would apply to all borrowers, regardless of where they live. Instead, the bill, as approved by the committee, would continue today’s patchwork of state and local laws that present implementation challenges for lenders who operate in multiple states and lead to increased costs for consumers.”
Story said MBA has also expressed concern about the creation of a new government bureaucracy that could result in financial institutions facing conflicting regulatory guidance from two regulators – the CFPA and their existing prudential regulators.
“A better approach would be to create a national regulator for mortgage banks that would regulate for both consumer protection and safety and soundness. Existing federal regulators could then be empowered to enforce consumer protections on the financial institutions they oversee,” he said.
“Moving forward, MBA will continue to work to make these and other improvements to the bill in the hope of finding common ground on a consumer protection bill that we can support.”