ALTA Thanks Shelby for Regulation Relief Bill

May 21, 2015

ALTA thanked Senate Banking Committee Chair Richard Shelby (R-Ala.) for introducing a proposal to increase oversight of the Federal Reserve and ease the regulatory burden on smaller banks and lenders.

The Financial Regulatory Improvement Act of 2015 would overhaul the Dodd-Frank Wall Street Reform Act and make structural changes to the Federal Reserve and to the nation's 10-agency financial stability council, known as FSOC. On May 21, the Senate Banking Committee passed the bill without any Democratic votes.

“We believe efforts to increase transparency and consumers’ access to credit and reduce regulatory burden are vital for our members,” Michelle Korsmo, ALTA’s chief executive officer, wrote in the May 19 letter.

Despite the focus on lenders, the bill contains a number of provisions relating to the title industry. Through ALTA’s efforts, section 117 creates a hold-harmless period under the TILA-RESPA Integrated Disclosures (TRID) rule until the CFPB can certify that its rule complies with all state laws—including laws related to title insurance rates. The section also requires the CFPB to amend its rules to ensure that consumers do not face a new three-day waiting period if their interest rate goes down right before closing.

An amendment added to the bill would require the GAO to study the title insurance and ancillary fees charged by companies affiliated with lenders versus unaffiliated companies.

The bill also proposes to make some modifications to the Qualified Mortgage (QM) rule. One section of the bill would make all loans held on the books of the lender a QM under the rule. Another section specifically removes any fess paid into an impound account for future taxes and insurance from the 3 percent points and fees calculation.

Additionally, the bill reaffirms Congress’s commitment to state regulation in section 401. It also requires the creation of an insurance advisory committee at the Federal Reserve.

“We are grateful for your reaffirmation of the principles of the McCarran Ferguson Act and our system of state regulation for insurance,” Korsmo wrote. “As we learned during our financial crisis, state regulation of insurance works and should continue to be supported.”

Finally, while the bill does not tackle GSE reform directly, it does attempt to build upon FHFA’s efforts to build a technology base to support the future secondary market for mortgages by codifying the common securitization platform, boosting GSE risk-sharing initiatives and establishing an advisory committee on development of market infrastructure.

For more information on this legislation, email Ben Lincoln, ALTA’s director of government affairs.

Contact ALTA at 202-296-3671 or