The Federal Reserve Boards decision to back away from finalizing three mortgage proposals under Regulation Z prior to the transfer of authority for such rulemakings to the Consumer Financial Protection Bureau (CFPB) is receiving praise from just about everyone.
“All along we have asked the Fed to suspend its Reg. Z rulemakings, knowing that the CFPB would soon take up many of the same TILA issues,” said John Courson, President of the MBA. “We agree with the Board’s analysis that completing these rulemakings, then having the CFPB do its own rulemaking shortly thereafter, would not be in the public’s best interest.”
The association said duplicate rulemakings would’ve increased confusion, regulatory burden, and lead to higher costs charged to consumers. “We look forward to working with the CFPB on its rule to address many of the same issues and to harmonize the TILA and RESPA consumer disclosures,” he said.
Congresswoman Maxine Waters (D-Calif.) and Senator Sherrod Brown (D-Ohio) both applauded the decision as well.
“By rescinding these proposed rules, the Fed is ensuring that homeowners continue to have a major defense against foreclosure and that elderly homeowners are protected from unscrupulous cross-selling,” said Walters. “At a time when our housing market is in crisis, we need more protections for homeowners; not less.”
“We need greater oversight and accountability in the mortgage market, not less,” Brown added. “We need to focus on restoring borrower confidence lost during the mortgage crisis, preserving home values, and protecting county and city budgets that are already stretched too thin.”