Six members of Congress, all from Missouri, wrote to Consumer Financial Protection Bureau Director Richard Cordray on Tuesday asking for the rules to be delayed. Reps. Blaine Luetkemeyer, Ann Wagner, Jason Smith, Sam Graves, Vicky Hartzler and Billy Long said January 2014 was too soon to implement the new rules.
“While we realize that these are final rules, we do believe that it is crucial to the stability of the mortgage market in our State and across the country that implementation be extended,” they wrote.
The lawmakers said that discussions with representatives from small banks and credit unions had convinced them that the new rules would stifle mortgage lending. A spokesperson for Smith’s office told MPA that the congressman represents a largely rural district with small lenders who could struggle even to hire the staff necessary to comply with the new rules.
“…(Bank representatives) have stated that banks and credit unions will not be able to lend unless they are certain they are in full compliance with these rules,” the lawmakers wrote in the Tuesday letter. “Ultimately, we fear that consumers and borrowers could ultimately pay the price in limited credit and difficulty obtaining home mortgages."
The lawmakers aren’t alone in calling for delayed implementation. Industry groups have also asked the CFPB to push back the new rules’ effective date. In November the National Association of Independent Mortgage Professionals called for a delay in implementing the so-called “qualified mortgage” rule, and both NAIHP and the National Association of Mortgage Brokers have made calls for the CFPB to reconsider a 3% cap on points and fees.
The CFPB did not return a call seeking comment.
New, stricter mortgage rules set to take effect in January should be delayed at least a year, several members of Congress say.