The Independent Community Bankers of America (ICBA) and a coalition of 41 state and regional community banking associations reiterated the community banking industry’s call for the Consumer Financial Protection Bureau (CFPB) to extend the mandatory compliance deadline for new consumer mortgage rules scheduled to take effect in January. In a joint letter to CFPB Director Richard Cordray, the coalition urged the bureau to allow compliance to be optional for a reasonable transition period of nine to 12 months.
“We understand the CFPB’s urgency in finalizing these mortgage requirements given the past abuses that have occurred in the mortgage market leading to the financial crisis,” the coalition wrote. “Nevertheless, our members have provided safe and solid mortgage loans to consumers in their communities for decades and were not responsible for the abusive mortgage practices that led to these new requirements.”
The coalition noted in its letter that the CFPB’s new mortgage regulations represent a complete overhaul of how mortgage loans will be underwritten, originated and serviced. These new requirements demand significant changes for community banks and the mortgage industry’s third-party participants, including the software providers on which community banks rely.
Extending the mandatory compliance deadline will better enable community banks to fully comply with the requirements and continue to provide customers with loan products that best satisfy their financial needs, they wrote.