The Obama Administration issued a Financial Regulatory Reform Proposal as of June 17, 2009.
The Mortgage Bankers Association writes:
“This proposal’s objectives are (1) promoting robust supervision and regulation of financial firms; (2) establishing comprehensive supervision of financial markets; (3) protecting consumers and investors from financial abuse; (4) providing the government with the tools it needs to manage financial crisis; (5) Raising international regulatory standards and improve international cooperation.
Key Points of Particular Interest – The Plan
Creates a broadly empowered new Consumer Financial Protection Agency (CFPA) with authority to regulate mortgage products, assuming from other regulators responsibilities under RESPA, TILA, HOEPA, ECOA, CRA, HMDA, and FDCPA;
Establishes the CFPA’s rules as a “floor” not a “ceiling” for additional state laws and allows states to enforce rules against federally chartered banks and other originators;
Provides authority to CFPA to require originators or securitizers to retain an interest in the credit risk of loans transferred in securities to private investors;
Authorizes new requirements for originator compensation that would disburse commissions over time based on loan performance;
Also, authorizes establishment of appropriate duties of care applying to financial intermediaries serving consumers, including a new “duty of best execution” for mortgage brokers; and
Indicates that administration will be working on its proposal for the future of the GSEs and reporting on that topic to Congress by early next year. “
This proposal has to go through many steps before it is officially put into place and there may be changes along the way. If you have any questions regarding this proposal, please visit www.mortgagebanker.org or contact our office.
Posted by Karen Gagliardi with Berlin Law Firm P.A., Marketing Development Coordinator.