Washington, DC – August 1, 2014 – (RealEstateRama) — U.S. Representative Randy Hultgren (IL-14) this week voted to support two bills which will relieve community banks from excessive regulations and protect their ability to lend to Illinois homeowners. H.R. 4042, the Community Bank Mortgage Service Asset Capital Requirements Study Act of 2014, and H.R. 5148, the Access to Affordable Mortgages Act of 2014, both passed the House Financial Services Committee (FSC), of which Rep. Hultgren is a member.
“Without healthy community banks, many responsible Americans – including my constituents in the 14th District of Illinois – could not own a home,” said Rep. Hultgren. “These banks lend based upon their customer relationships, which means they can often serve the borrowers that the larger banks may turn down. These bills provide some relief for community banks that are struggling under the weight of often unnecessary regulations.”
H.R. 4042 requires federal oversight agencies to study capital requirements for mortgage servicing assets at certain banks, including all small- and mid-sized banks, and delays the application of certain capital requirements for six months after completing the study. Easing regulations on community banks can free up their ability to lend to customers, such as small businesses and farmers.
H.R. 5148 exempts certain high-risk mortgages valued $250,000 or below from federal appraisal requirements. This eases compliance burdens on lenders and increases credit access for lower- and middle-income borrowers.
Rep. Hultgren previously signed a letter urging the Federal Reserve to appoint a community banker to the Federal Reserve Board of Governors, ensuring their interests are represented.
Rep. Hultgren also cosponsored a number of bills that have offered regulatory relief to community banks, including:
Portfolio Lending and Mortgage Access Act (H.R. 2673), which amends the Truth in Lending Act to define as a “qualified mortgage” a residential mortgage loan made by a creditor so long as the loan appears on the balance sheet of such creditor. This bill passed the FSC on May 22, 2014, by a vote of 36-23.
Mortgage Choice Act of 2013 (H.R. 3211), which modifies the definition of “points and fees” for the purposes of determining defining a Qualified Mortgage. H.R. 3211 passed the House on June 9, 2014 by a voice vote.
Community Institution Mortgage Relief Act of 2014 (H.R. 4521), which exempts community banks and credit unions with assets below $10 billion from escrow requirements for loans held in portfolio, and amends the Real Estate Settlement Procedures Act to increase the “small servicer” exception threshold to 20,000 annual loans (up from 5,000). H.R. 4521 passed the FSC by a vote of 43-16.