MBA Letter Offers Recommendations on 2 House Bills

The Mortgage Bankers Association, in a May 12 letter to House Financial Services Committee leadership, expressed concerns with two bills currently under the Committee’s consideration and offered recommendations to improve those bills.

The letter to Committee Chair Maxine Waters, D-Calif., and Ranking Member Patrick McHenry, R-N.C., offered comments on H.R. 3009, which would amend the Truth in Lending Act and the Real Estate Settlement Procedures Act to establish language access requirements for creditors and servicers; and H.R.166, the Fair Lending for All Act, which would establish an Office of Fair Lending Testing to test for compliance with the Equal Credit Opportunity Act and amend the ECOA to provide for criminal penalties for violating the Act.

MBA said the legal framework of H.R. 3009, introduced by Rep. Sylvia Garcia, D-Texas, should avoid imposing compliance burdens that would significantly increase lender liability associated with serving borrowers with limited English proficiency. To encourage lending to LEP consumers, MBA believes that any legislation pertaining to this issue should reflect the following considerations:

• a federal preemption clause to provide lenders with a uniform legal framework across the country;

• clarification of what constitutes “oral interpretation” services;

• ample time for covered entities and regulators to fully develop a system that works to encourage lending in all communities;

• a safe harbor for lenders complying in good faith with LEP legislation and regulation;

• a readily available publicly accessible database of CFPB, HUD, and/or FHFA approved interpretation services, so that lenders have access to reputable translating individuals and entities;

• limiting any requirement to provide oral interpretation to the languages covered by written translations prepared by the CFPB and FHFA (e.g., the eight most commonly spoken languages by LEP consumers);

• a reasonable definition for the types of consumer and borrower communications that must be accommodated in the consumer’s preferred language; and

• improved accessibility and interagency harmonization of the FHFA’s Mortgage Translations clearinghouse, a resource created through extensive industry/regulator collaboration.

“We look forward to continuing discussions with members of this Committee to reach a possible consensus as this proposal moves towards House floor consideration,” wrote MBA Senior Vice President of Legislative and Political Affairs Bill Killmer.

MBA also expressed concern that H.R. 166, introduced by Rep. Al Green, D-Texas, in its current form would create interpretations of ECOA that would be difficult to comply with and confusing.

“We are also concerned the bill would require lenders to ask invasive personal questions of borrowers,” Killmer wrote. “Though we are unable to support this proposal in its current form, we stand ready to work with members of the Committee to help develop legislative proposals that would serve to eliminate discrimination and ensure equitable access to homeownership opportunities.”