Rep. Hanabusa Votes to Reduce Loan Costs for Community Lenders
The Community Institution Mortgage Relief Act, H.R. 3971 passed the House by a vote of 294-129 on Tuesday, Dec. 12, 2017.
The bipartisan bill, introduced by Congresswoman Claudia Tenney, is intended to assist small community financial institutions by rolling back escrow regulations that have significantly increased the cost of servicing loans, particularly for those borrowers with low-income. The bill does not prohibit community banks from providing escrow services.
Under current law, the Truth in Lending Act, as amended by the Dodd-Frank Act, requires creditors to establish and hold escrow accounts on mortgage loans, a costly requirement that can burden small community-based institutions.
“Community lending institutions, including those in Hawai‘i with smaller staffs and significantly less resources than larger financial institutions, have sought relief from costly escrow regulations,” said Rep. Hanabusa. “Mandating a one-size-fits-all policy that requires all institutions follow similar escrow requirements only raises the cost of credit for borrowers who can least afford it and negatively impacts small businesses and consumers who look to community lending institutions for capital.”
H.R. 3971 was supported by:
The New York Credit Union Association
Independent Community Bankers Association
National Association of Federal Credit Unions
Credit Union National Association
American Bankers Association
Mortgage Bankers Association