House passes lending reform bills

The House passed legislation on Monday to modify regulations for financial lending agencies.

Many of the bills passed the House in the last Congress, but didn’t make it through the Senate.

One measure, approved 401-1, would direct the Consumer Financial Protection Bureau (CFPB) to establish a two-year program to allow individuals to apply for rural area designations for purposes of eligibility for qualified mortgages. Currently, the CFPB uses rural designations established by the Department of Agriculture.

{mosads}”Without the ability to have flexibility to make these kinds of mortgages, in many cases there would not be mortgages available in those communities,” said Rep. Randy Neugebauer (R-Texas). 

Rep. Michael Capuano (D-Mass.), whose district includes Boston, joked that he considers a rural area to be “any place that would take me more than 15 minutes to drive to some good Italian food.”

Another bill, passed by voice vote, would waive an annual requirement for financial institutions to notify customers of their disclosure policies if such practices have not changed since the last notification. 

Lawmakers said the measure would save money and limit customer confusion.

“This will not only save money for the small and medium-sized institutions and the entire financial services industry, it’s going to get the consumer to focus on changes that are important,” said Rep. Brad Sherman (D-Calif.). 

Sherman argued that only issuing privacy policy notices would highlight any important changes for consumers.

“There is no better way to hide a tree than to put it in the forest,” Sherman said.

A third measure, passed 401-2, would require all CFPB advisory committees to comply with standards under the Federal Advisory Committee Act (FACA). The law requires that agencies make advisory group meetings open to the public. Agencies must also provide at least 15 days advance notice of meetings in the Federal Register.

The Federal Reserve, under which the CFPB operates, is exempt from FACA’s requirements.

Rep. Sean Duffy (R-Wis.), the bill’s sponsor, noted that bipartisan agreement on issues related to the CFPB is rare.

“As we gather in this chamber, I don’t think it’s very often that we come in a Kumbaya moment in regard to the CFPB,” Duffy said.