While members of the US Senate and House of Representatives meet to negotiate the final version of Wall Street reform legislation, Senators Claire McCaskill (D-MO) and Herb Kohl (D-WI) sent a letter to the members of the conference committee urging them to preserve language they feel will improve consumer protections and strengthen oversight of the reverse mortgage industry.
“We believe it is critically important to ensure that there are strong consumer protections in place so that seniors who do not need or want these expensive products will not be pressured into buying them,” the senators wrote in the letter.
Several weeks ago, McCaskill and Kohl introduced an amendment to the Wall Street reform legislation that would have required the new Consumer Financial Protection Bureau to issue a new rule to create standards for whether a reverse mortgage is suitable for seniors, prohibit misleading advertisements, and increase regulation and transparency of the reverse mortgage industry.
The industry was not supportive of the amendment because it would’ve have eliminated the reverse mortgage as a possible solution for seniors at the very time they may need it the most said Peter Bell, Peter Bell, President of the National Reverse Mortgage Lenders Association.
While it never made it to the floor for debate, the bill that passed the House included an amendment meant to “oversee the reverse mortgage industry and ensure seniors are not exposed to unfair and deceptive practices,” said Congresswoman Dina Titus, one of the sponsors of the amendment in an statement earlier this year.
The amendment included in the House bill requires the Director of the Consumer Financial Protection Agency to issue regulations regarding reverse mortgage transactions within one year of the date of the enactment. Additionally, the bill calls to clarify the director’s authority to consider additional protections regarding reverse mortgages under both consumer statues and HUD regulations.
The two Senators sent a letter the conferees to include the provision in the conference report, asking the conferees to “make clear that nothing in the bill is intended to limit or constrain the new consumer regulator’s authority to write rules or enforce consumer protections on reverse mortgages under other existing statutes which are not named explicitly in Section 4316 of the House-passed bill.”
McCaskill and Kohl emphasized that “stronger consumer protections in the reverse mortgages industry will help protect America’s seniors from predatory lending practices and ensure that America’s seniors are never pressured into purchasing exotic financial tools that aren’t suitable for them.”
You can read a copy of the letter sent to the conferees here.