Member News - Mortgage Bankers Association of Maine
Below is a letter from MBA of America President John Coursen and Chariman David Kittle to members regarding the Obama administration's proposed reform of financial regulation:
June 17, 2009
Dear MBA Member:
Today, President Obama released his long-awaited proposal for reform and modernization of the nation’s financial regulatory regime with the stated objectives of: (1) Promoting robust supervision and regulation of financial firms; (2) Establishing comprehensive supervision of financial markets; (3) Protecting consumers and investors from financial abuse; (4) Providing the government with the tools it needs to manage financial crises; (5) Raising international regulatory standards and improve international cooperation. The proposal is wide-ranging and will have significant impact on the mortgage industry.
I have attached MBA’s summary of the Obama proposal, but I wanted to bring to your attention a few specific highlights of interest to our industry.
Specifically, the proposal:
• Creates a broadly empowered new Consumer Financial Protection Agency (CFPA) with authority to regulate mortgage products, assuming from other regulators responsibilities under RESPA, TILA, HOEPA, ECOA, CRA, HMDA and FDCPA;
• Establishes the CFPA’s rules as a “floor” not a “ceiling” for additional state laws and allows states to enforce rules against federally chartered banks and other originators;
• Provides authority to CFPA to require originators or securitizers to retain an interest in the credit risk of loans transferred in securities to private investors;
• Authorizes new requirements for originator compensation that would disburse commissions over time based on loan performance;
• Authorizes establishment of appropriate duties of care applying to financial intermediaries serving consumers, including a new “duty of best execution” for mortgage brokers;
• Eliminates the thrift charter and creates a National Bank Supervisor (NBS) to regulate all federally chartered depository institutions, and all federal branches and agencies of foreign banks.
• Increases regulatory oversight of bank holding companies and financial holding companies;
• Indicates that administration will be working on its proposal for the future of the GSEs and reporting on that topic to Congress by early next year.
We are pleased to note that much of how the proposal treats the mortgage industry indicates that the Obama administration has reviewed and given thoughtful consideration to both MBA’s Mortgage Improvement and Regulation Act (MIRA) as well as our 2008 policy paper discussing the differences between mortgage bankers and mortgage brokers and how those differences warrant different types of regulation.
It is important to remember that this announcement is just first step in a long process for regulatory reform. Most of the components of this proposal will need to be implemented by Congress and I would expect significant changes as it makes its way through the House and Senate. Be assured that MBA will be actively engaged with members of both parties on both sides of Capitol Hill, as well as the administration, as Congress considers reform measures.
Attached please find MBA’s press statement and our summary of today’s proposal, in addition to the administration’s 88-page proposal.
As always, if you have any questions, please let me know.
Yours Very Truly,
John A. Courson
President and Chief Executive Officer
Mortgage Bankers Association
David Kittle, CMB
Chairman
Mortgage Bankers Association
MBA's Obama Reg Reform Summary 6-17-09.pdf