Legislative Status:
HUD’s proposed rule:
Its Over!! At least for now.
We owe many thanks to our congressmen and women in Washington for their efforts in stopping this bad rule. Each of you who reads this needs to call your congressman/woman and thank them for signing the letter that was forwarded to the Office of Management and Budget (OMB) and signed by 226 representatives stating that it was a bad rule and that OMB needed to return it for further study and public comments.
The Tennessee representatives who signed the letter were: Harold Ford Jr., John Tanner, Marsha Blackburn, Bart Gordon, Jim Cooper, Lincoln Davis, and Zach Wamp. Each of these people are heroes for our industry.
In light of the letter, and a threat by Senator Wayne Allard of Colorado that he would block the nomination of Acting Secretary Alphonso Jackson from approval for the permanent position, HUD withdrew the proposed rule.
Other heroes in this fight were Representative Don Manzullo R-Ill, Chairman of the House Small Business Committee and Senator Richard Shelby R-AL, Chairman of the Senate Banking Committee as well as our own NAMB officers and lobbyists who fought vigorously, tirelessly and unwaveringly to stop implementation of the rule. Also for those of you who wrote or called your representatives, a sincere thank you to you as well. Everyone in the industry is indebted to you for taking action to help in the defeat of this rule.
Don’t relax completely, a revised rule could still be back, but not likely this year. Please consider at least a $100.00 donation to protect your business. Go to www.namb.org and find the blue rectangle titled Professional Protection Fund. Follow the directions and make your donation today. Don’t expect someone else to do it. Do Your Part!
Washington DC Legislative Conference
As legislative chairman I traveled to DC for the NAMB Legislative Conference at the end of March and on the first day of the conference we got the news that HUD had withdrawn the proposed rule. As can be expected there was much merriment. After that initial excitement we got down to work and heard speaker Representative Don Manzullo talk about where national predatory legislation might go. It not likely that anything will be done this year, but there is a mounting sentiment that it might be necessary to standardize lending through a state pre-emption of predatory lending laws such as New Jersey, New Mexico, and others so the national lenders whom we all deal with will have a uniform standard for secondary market sales.
On lobby day, I had an opportunity to meet with Representatives Ford, Blackburn, Cooper, and Jenkins. I also met with legislative aids for Representatives Duncan, Davis, Gordon, and Tanner and Senators Frist and Alexander.
We discussed the national Predatory lending law, (we are generally for standardization of lending rules), Department of Labor revisions regarding overtime and minimum wage (we are in favor of clarification of the current rules that are over 50 years old) and national registration of originators ( we are for it).
It is great to see that we are recognized as a national association with considerable clout as our numbers grow, and also as a strong state organization as well. We are listened to and we do have strength in numbers.
State Predatory Lending Bill:
As we have advised you before the Proposed “Tennessee Home Protection Act” has been put on indefinite hold by the Department of Financial Institutions (DFI) due to the preemption of national banks by the Office of the Comptroller of the Currency (OCC). Commissioner Lavender has stated that he will not create an un-level playing field in Tennessee for different types of financial institutions. The OCC preemption would only exempt national banks from state laws. State banks, mortgage lenders and mortgage brokers would then operate under a different set of rules. The OCC preemption is being challenged by several states and, should it be overturned, the DFI will proceed with their legislation. Until then it will continue on hold.
State Licensing and Continuing Education Bill:
As part of the proposed “Tennessee Home Protection Act” TNAMB along with our other industry partners have pushed for licensing and continuing education requirements for all originators licensed under the “Tennessee Residential Mortgage License” Law. We were in the forefront in pushing for this important piece of legislation to set up accountability for loan officers operating in Tennessee.
The DFI, although not initially in favor of licensing and continuing education, has modified their stance and the remaining piece of legislation coming from the department is in the form of registration of individual loan officers. This registration will enable the department to know where every loan officer in the state is working and will prohibit loan officers from working through more than one lender or broker. It will also enable the commissioner to levy fines up to $10,000.00 against any lender or broker found in violation of the law. The commissioner has expressed his belief that the industry needs to clean itself up by encouraging lenders and brokers to monitor their own employees through good hiring practices, which might include doing background checks. He also believes that lenders and brokers should look to educating their loan officers and monitoring their activities to be sure that they are doing business in an ethical and legal way.
The commissioner has also said that there will be tightening the scrutiny of applications for lenders and brokers in the state with a particular emphasis on financial statement review.
This legislation can be reviewed by going to: http://www.legislature.state.tn.us.bills/currentga/BILL/SB3455.pdf
Jack Sullivan, CRMS
