ABA Urges CFPB Against Excessive Compliance Burden on Mortgage Lending

The American Bankers Association sought actions last week in a letter to the Consumer Financial Protection Bureau that seek immediate relief for banks that offer mortgage products. The letter, written by Frank Keating, ABA president and CEO, stressed the burden mortgage lenders are experiencing, and the fear it is reaching an unsustainable level.

“The current regulatory environment is proving excessively burdensome for banks that offer mortgage products, and ABA is extremely concerned about the ability of community banks to continue to offer safe, high quality mortgage products as they have in the past.”

Addressed to Raj Date, special advisor currently in charge of the bureau, the letter urges three main considerations: First, that the CFPB set a timetable for implementation of mortgage rules under Dodd Frank; second, that it review comments on the ability-to-repay proposed rule in a timely manner; and third, that it clarify “confusing” provisions in the Truth in Lending Act rules that govern loan officer compensation.


“Our community bankers tell us very emphatically that the regulatory compliance burden is reaching the point where many are seriously questioning the viability of the community bank business model, and all banks report that they are analyzing the continued feasibility of particular products and services, particularly in mortgage lending,” the letter said.

View a copy of the letter.

Written by Elizabeth Ecker

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  • Is this the organization that so many in the mortgage industry indicated their support of?  Did anyone actually believe that an organization that a consumer advocate Harvard law professor started up would be less burdensome for lenders? 

    Dr. Warren never ran anything worth discussing.  She could write and pontificate.  She reminds one of someone else….

  • Critic: You are on the money! The banks and banking associations have been cowering in their corners for over two years now! Now when it seems there is no light at the end of the tunnel with all the over regulation they are starting to speak up. Too little too late!
    None of these community organizers have practical business experience. They have their own agenda! 

  • I’ll state the obvious:  Over regulation is a deterent to engaging in a line of business.  Less available options is bad for consumers. 

    What caused the “mortgage meltdown” was the offering of home loans for which homeowners weren’t required to reasonably prove that they could make the related monthly payments.  Regulators have and are continuing to go way beyond that in their regulations. 

    • Lance,

      I do not disagree with your portrayal of regulators but regulators did not create the right to regulate in the new areas (such as those created in and with the CFPB) regulators are now imparting their “vast wisdom and insightful guidance.” 

      Who provided regulators with that opportunity was Senator Dodd with a Democratic Congress and Democratic President.  Some in our own industry advocate that when Democrats are in power, HECMs do better.  Well let’s see is that true? 

      Once the policies of the new President and the 111th Congress took effect, things have been getting better???  Was our industry in better shape now than it was 30 months ago???  Are things better for seniors now than 30 months ago???

      At least we know the approval rating of this President and his Congress is about where it should be.  Oh that is right, we no longer have the 111th Congress sitting in Washington anymore.  Can the President be far behind?  Time will tell.


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