ICBA Backs Community Bank Loan Exemptions from Mortgage Rules

ICBA Backs Community Bank Loan Exemptions from Mortgage Rules

Community banks should not be driven from the mortgage market by new regulations

Washington, D.C. – September 13, 2012 – (RealEstateRama) — Community banks were not responsible for the mortgage crisis, and therefore community bank portfolio loans should be exempt from pending regulations on high-cost mortgages the Independent Community Bankers of America (ICBA) said. In a comment letter to the Consumer Financial Protection Bureau (CFPB), ICBA said that the bureau should provide exemptions for community bank portfolio loans to ensure that community banks are not driven from the mortgage market and can continue to serve customers in their communities.

“ICBA understands the intent of Congress to further regulate the mortgage industry to prevent these abuses from occurring in the future and further stabilize the housing market,” ICBA wrote in the comment letter. “Nevertheless, the reality is that more stringent and complicated mortgage requirements will further stymie the housing market and community banks’ flexibility in providing mortgage loans to their customers.”

In its comment letter on proposed amendments to the Home Ownership and Equity Protection Act (HOEPA), ICBA noted that the CFPB’s definition of points and fees is too broad and should be clarified for open-end and closed-end credit. The association wrote that third party and affiliate fees and employee compensation should not be included in calculating points and fees.

ICBA also wrote that the bureau should allow financial institutions to correct unintentional violations. The association wrote that creditors should have at least 60 days to find mistakes and notify the consumer and at least 30 additional days to correct the error, which would benefit consumers and allow banks to address any inadvertent mistakes without the expense and burden of litigation.

Finally, ICBA wrote that HOEPA regulations should allow community banks to continue to provide balloon payment mortgage loans if the loans are held in portfolio until maturity. Community bank balloon payment mortgage loans are low-risk loans that community banks have used to serve the unique needs of their customers for decades. CFPB regulations that do not allow these community bank loan products will harm consumers in the long term, not help them.

Media Contact
Aleis Stokes
(202) 821-4457

Media Contact
Ann Chen
(202) 821-4346

SHARE

The Independent Community Bankers of America (ICBA) represents the largest constituency of community banks of all sizes and charter types in the nation, and is dedicated exclusively to representing the interests of the community banking industry.

Contact:

Aleis Stokes
Phone: (202) 821-4457

Karen Tyson
Phone: (202) 821-4454

Washington DC Office
1615 L Street NW
Suite 900
Washington, DC 20036

Phone: 800-422-8439
Fax: 202-659-3604

Previous articleAIA Selects Four Projects for National Healthcare Design Awards
Next articleBrown Announces That Housing Advocate And Miami Valley Leader Was Named To Consumer Financial Protection Bureau Advisory Board