House Committee Advances Transitional Authority Legislation

The House Financial Services Committee, by unanimous consent, yesterday advanced a bill that would enable mortgage loan originators to move from one institution to another while working to meet SAFE Act licensing and testing requirements.  

H.R. 2121, the SAFE Transitional Licensing Act ), provides transitional authority to originate mortgages for individuals who move from a federally insured institution to a non-bank lender while they work to meet the SAFE Act’s licensing and testing requirements. Transitional authority would be available to mortgage loan originators who have a clean history as an originator (e.g., no license denials, revocations or suspensions, no cease and desist orders and no felonies that preclude licensing).  

Mortgage Bankers Association Senior Vice President of Legislative and Political Affairs Bill Killmer called the vote a “big win,” noting that MBA has worked closely with regulators, other industry trade groups, consumer groups and legislators in building support for the bill.  

“We’re heartened that it’s moving forward. It’s a common-sense proposal,” Killmer said. “Today’s success was a direct product of over a year of advocacy by MBA and its members–whose shoe leather lobbying in the halls of Congress, during the National Advocacy Conference and through the Mortgage Action Alliance, helped build support for this important effort. Put simply, this is what happens when our members partner with MBA in sustained activism.”  

Financial Services Committee Chairman Jeb Hensarling, R-Texas, echoed Killmer’s sentiment, calling the bill a “common-sense solution that would promote more efficient markets.”   MBA ramped up its support for the bill this week by sending two letters to Committee members. Additionally, the Mortgage Action Alliance, MBA’s grassroots advocacy arm, sent out two Call-to-Action alert to its members, urging them to contact committee members in support of H.R. 2121.  

The next step for H.R. 2121 is the House floor. Killmer said MAA would issue another Call-to-Action in coming days to contact their representatives, asking them to co-sponsor the legislation and request the bill be placed on the legislative calendar.  

The Committee yesterday also approved H.R. 2901, the Flood Insurance Market Parity and Modernization Act ({“search”:[“”hr2901″”]}&resultIndex=1), which also had MBA support. This bill would correct language in the Biggert-Waters Flood Insurance Reform Act of 2012 that had the unintended consequence of making it more difficult for private insurers to provide private flood insurance and for lenders to accept those policies. This bipartisan bill would amend the definition of “private flood insurance” to restore the discretion necessary to allow lenders, private insurers, and regulators to develop a functional private insurance market.