ICBA to Congress: Focus mortgage reforms on market’s problem areasMortgagePress.comIndependent Community Bankers of America, Congress, mortgage reforms, abusive lending, Mortgage Reform and Anti-Predatory Lending Act of 2009
The Independent Community Bankers of America (ICBA) has urged
Congress to focus mortgage reforms on companies that engaged in
imprudent and abusive lending practices, such as less-regulated
mortgage brokers and non-bank lenders, and to avoid creating a
mortgage finance system that could make it more difficult for
credit-worthy consumers to obtain credit if it is too rigid to
respond to changing interest rate and lending environments, and
customer needs.
"Our nation's more than 8,000 community banks are the bright
spot in the struggling mortgage market because they made smart
loans and did not engage in the risky practices that contributed to
the current crisis," said R. Michael Menzies, ICBA chairman and
president and CEO of Easton Bank and Trust in Easton, Md., in his
testimony to the House Financial Services Committee. "ICBA supports
sound mortgage reforms to prevent abusive mortgages and help
preserve our local economies and urges Congress not to diminish the
ability of community banks to serve Main Street America."
Menzies warned that new lending standards proposed under the
Mortgage Reform and Anti-Predatory Lending Act of 2009 (HR 1728)
could produce excessive rigidity in the mortgage market that could
affect access to credit and keep community banks from meeting
customers' needs. Menzies urged that a broader range of safe
mortgage products, not just certain 30-year fixed rate loans,
qualify as "safe harbor" loans that meet the standards laid out in
the bill.
Menzies also said ICBA supports provisions that would prevent
lenders from steering consumers to sub-prime products when they
qualify for prime loans, but urged Congress to focus on non-bank
mortgage originators, the sector where regulation is needed
most.
ICBA looks forward to working with Congress to create a
regulatory regime that prevents abusive mortgages, while providing
the mortgage finance industry flexibility to meet consumers'
needs.
For more information, visit www.icba.org.
