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As Congress tackles the difficult task of bringing needed reform to mortgage industry regulation, the Mortgage Bankers Association (MBA) has developed a proposal for reforming lending and servicing practices and streamlining and improving consumer protection.
MBA’s proposal – the “Mortgage Improvement and Regulation Act” (MIRA) – would establish a new, comprehensive framework for national regulation of mortgage lending to protect borrowers and improve the mortgage process nationwide. MBA is actively sharing this proposal with Congress (read letters to House and Senate ).
October 13: MBA Sends Letter to Congress Raising Strong Concerns with Consumer Financial Protection Agency (CFPA) Bill
MBA President and CEO John Courson sent a letter to House Financial Services Committee Chairman Barney Frank (D-MA) and Ranking Member Spencer Bachus (R-AL) outlining MBA's concerns with H.R. 3126, the Consumer Financial Protection Agency Act. Chief among those concerns is that the bill fails to empower the CFPA to establish uniform national standards that will regulate all lenders and protect all borrowers consistently regardless of where they live. MBA also objected to the creation of a CFPA as a stand-alone agency, rather than placing consumer protection functions within a prudential financial regulator.
Read the letter.
More on MIRA
“On behalf of our 2,400 members, MBA stands ready to work with Congress on legislation that achieves these goals. Reform of mortgage industry regulation is urgently needed and must be a key component of our nation’s economic recovery. With MIRA, we believe we have a comprehensive proposal that is truly national in scope – one that will lead to a more competitive primary mortgage market with increased transparency and much greater protection for consumers,” said John A. Courson, President and Chief Executive Officer, Mortgage Bankers Association.
Read a summary of the proposed legislation.
Read a side-by-side comparison matrix of H.R. 3915 (Frank Bill), Federal Reserve’s Final HOEPA Rule and MBA's Draft Mortgage Improvement and Regulation Act (MIRA).
Read MBA's Issue Brief on MIRA.
Read the testimony of David G. Kittle, CMB, Chairman, Mortgage Bankers Association, before the Subcommittee on Financial Institutions and Consumer Credit, Committee on Financial Services, United States House of Representatives, hearing on “The Current State of the American Mortgage Lending System and Proposals to Reform that System” from March 11, 2009
Some of the key areas of reform in this proposed legislation include:
New, Federal Regulation. Any new regulatory framework must begin with the creation of a strong federal regulator to set lending and servicing standards. The new regulator would be charged with regulating independent mortgage bankers and brokers and assuring that these entities meet tough national licensing and registration standards as well as increased net worth and bonding requirements. The new regulator also will work with federal and state regulators to enforce lending standards for their regulated entities. Additionally, to better protect consumers, MIRA will require enhanced consumer disclosures, mandate pre-purchase counseling and expand financial literacy programs.
A Strong Consumer Protection Standard for Everyone, Regardless of Who Sells the Mortgage Or Where They Live. MIRA will replace the current patchwork of state and federal laws with a new uniform lending standard, incorporating in statute many of the rules promulgated by the Federal Reserve Board to address higher priced mortgage loans and deceptive advertising. It will then build on that framework by merging in many of the provisions passed by the House of Representatives in 2007 as part of H.R. 3915, as well as new, enhanced protections designed by MBA.
A Partnership with State Regulators. While MIRA would preempt contrary state and local laws, it would establish a partnership of state and federal regulators to make necessary changes to the national mortgage standards. State regulators would also examine, review and enforce the new uniform lending standard and receive additional resources, funded by assessments on regulated entities, to carry out their responsibilities.
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