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Congress passes Dodd-Frank reform bill

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RESPA-TILA-TRID-CFPB-NAR-NAHB-regulations-August-deadline-Congress

The House of Representatives passed the first major rollback of the 2010 Dodd-Frank Act on May 21. After passing the Senate back in March, the bill is now ready for President Donald Trump to sign.

Several Democrats crossed the party line to vote for S. 2155 — the Economic Growth, Regulatory Relief, and Consumer Protection Act —which passed the House 258-159.

The National Association of Realtors had urged House support in a letter sent before Tuesday’s vote. According to NAR, the new bill included favorable provisions for housing, such as easing mortgage credit through reduced regulatory burdens on smaller community banks and credit unions.

“We commend members of Congress for passing this bipartisan legislation to level the lending playing field for community banks and credit unions,” said NAR President Elizabeth Mendenhall. “This bill provides appropriate consumer protections while going a long way toward removing undue regulatory burdens on small lenders, which will help keep them strong, so they can help keep communities strong.”

David Stevens, president and CEO of the Mortgage Bankers Association, also praised the decision in a written statement.

“I want to commend the House of Representatives for joining the Senate and passing this bill, which will protect consumers and provide greater access to mortgage credit,” he said.

Another aspect of the bill that has been lauded by the real estate industry is a requirement for Fannie Mae and Freddie Mac to evaluate and consider alternative credit scoring models that take into account various factors, including whether borrowers pay their rent and utilities on time.

“We believe utilizing newer, more predictive and inclusive credit scoring models will responsibly expand access to mortgage credit and homeownership to first-time borrowers and those who lack access to traditional forms of credit because of ‘thin’ credit files,” NAR said in a statement.

However, opponents to the bill believe that that there are many potentially harmful effects.

“One of the most harmful elements of the bill is its weakening of the Home Mortgage Disclosure Act (HMDA), which is a key tool to detect and prevent discriminatory practices in the mortgage market. S. 2155 would allow 85 percent of depository institutions to avoid reporting new HMDA data required by Dodd-Frank even though they are already collecting the data – badly undermining efforts to ensure fair lending,” said Rep. Maxine Waters.

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