CFPB, FHFA Assessing Key Mortgage Industry Rules
Written By: Joel Palmer, Op-Ed Writer
A pair of proposed rules of interest to mortgage underwriters and processors were announced last week.
The Consumer Financial Protection Bureau (CFPB) announced an assessment of the TRID Integrated Disclosure Rule. The bureau is seeking public comment on the rule through January 21, 2020.
CFPB said it will assess the rule’s effectiveness in meeting the objectives of Title X of the Dodd-Frank Act.
The TRID Rule implemented the Dodd-Frank Act’s directive to combine certain mortgage disclosures that consumers receive under TILA and RESPA and requires that all creditors use standardized forms for most transactions. Creditors are also required to provide loan estimates and closing disclosures within three business days.
Commenters can suggest ways to modify, expand or even eliminate the rule.
CFPB said it will issue an assessment report by October 2020. It said the report will not likely include specific proposals to modify the rules. The findings made in the assessment will inform the bureau’s general understanding of implementation costs and regulatory benefits.
Another major rule announcement last week was by the Federal Housing Finance Agency (FHFA), which plans to re-propose the entire regulation on capital requirements for Fannie Mae and Freddie Mac next year.
In June 2018, FHFA proposed a rule that would implement a new framework for risk-based capital requirements and a revised minimum leverage capital requirement for the enterprises.
In October, FHFA modified the preferred stock purchase agreements of Fannie and Freddie to enable them to retain more capital. Fannie Mae can retain up to $25 billion in capital, while Freddie Mac will be permitted to maintain capital reserves of $20 billion.
That announcement came about a month after Treasury released its plan to reform the housing finance system, which included a recommendation to enable the GSEs to retain more capital.
“The 2018 Capital Rule was proposed before FHFA began the process of retaining capital at the enterprises as a first step toward ending the conservatorships. In fairness to all interested parties, the comments submitted during the previous rulemaking were submitted under a different set of assumptions about the future of the enterprises. During the process of the rulemaking, important issues were identified that will be addressed in the re-proposal,” said FHFA Director Mark Calabria.
“The Capital Rule is one of the most important rules I will issue as director. This rule will be re-proposed and finalized within a timeline fully consistent with ending the conservatorships. Requiring the enterprises to build capital that can properly support their risk ensures that taxpayers will never be on the hook again during an economic downturn.”
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
