WASHINGTON (6/18/13, UPDATED 10:24 a.m. ET)--Opening today's House subcommittee hearing on "Examining How the Dodd-Frank Act Hampers Home Ownership," Rep. Shelly Moore Capito (R-W.Va.) said it could be the very consumers that are meant to be protected by the Consumer Financial Protection Bureau's Abilty-to-Repay mortgage rule that could be harmed by unintended consequences of the rule.
Capito, chairman of the House Financial Services subcommittee on financial institutions and consumer credit conducting today's hearing, said low-income consumers, and those in rural areas with low property values, could find the ability-to-repay rule eliminates mortgage lenders' ability to engage in "relationship lending." She said "case-by-case, local lending" could disappear because of "rigid mortgage lending rules" proposed by the CFPB.
Today's hearing, at which Credit Union National Association witness Jerry Reed will detail credit union concerns with the CFPB qualified mortgage (QM) regulations when he testifies, is the second in the subcommittee's on this issue. The ability-to-repay rule was issued in conjunction with the QM rule. Reed is chief lending officer at Alaska USA FCU.
Rep. Sean Duffy (R-Wis.) said there appears to be a bipartisan agreement on the need to fix some parts of the Dodd-Frank Act, though other members spoke in favor of that law's provisions. For instance, Rep. Carolyn Maloney (D-N.Y.) said Dodd-Frank is intended to show "we learn from our mistakes."
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