Bill attacks safe mortgage standards and exempts the largest banks from complying with key consumer protections
(Long Island, NY) On May 12, Senate Banking Committee Chairman Richard Shelby unveiled a discussion draft of a bill that would, among other things, undermine key banking and mortgage reforms established by the landmark Wall Street Reform and Consumer Protection Act.
Center for Responsible Lending vice president Mitria Wilson offered the following remarks:
For five years, post-crisis lending rules have made the financial system safer by eliminating abusive financial products, reining in reckless behavior, and encouraging more effective oversight. The draft legislation released by Chairman Shelby seeks to gut these protections and rollback the safeguards that helped this country recover from the worst financial crisis in recent history.
The draft bill favors large financial institutions over community lenders, undermines consumer protections designed to prevent another economic meltdown, and creates bureaucratic hurdles for mortgage lenders. This is an extreme measure that, if passed, would raise the cost of mortgages, trap borrowers in unsustainable debt, and allow for many of the same unfair and deceptive practices that brought about the recent crisis.
There are certainly ongoing challenges in the mortgage market that should be addressed including ensuring all creditworthy borrowers have access to fair and affordable credit. But we head in the wrong direction if we weaken – and in some cases eliminate – fundamental standards that keep mortgages safe, banks accountable, and people protected.
This is not a bill that serves the best interests of consumers or families.
This bill is scheduled to be marked up on Thursday, May 21 in the Senate Banking Committee.
To speak with Mitria Wilson – or to learn more about the specific provisions of theFinancial Regulatory Improvement Act of 2015 – please contact Andrew High at Andrew.High@
