Industry groups asked the Consumer Financial Protection Bureau Wednesday to convene a panel to review the potential effects of new mortgage lending standards on small businesses.
Normally, the bureau is one of three agencies required under the Small Business Regulatory Enforcement Fairness Act to get feedback from smaller companies on rules significantly affecting them. Yet the mortgage rule, which would raise demands on lenders to prove a borrower's ability to repay, is an exception since it was first proposed by the Federal Reserve Board. (The Fed lost consumer rule-writing authority under the Dodd-Frank Act.)
But a letter from the industry groups — which include the American Bankers Association, Independent Community Bankers of America, Mortgage Bankers Association, National Association of Realtors and the U.S. Chamber of Commerce — said "regulatory best practice calls for the CFPB to formally consult with small businesses through a [SBREFA] panel."
While the agency recently reopened the comment period on the rule — also known as the qualified-mortgage, or QM, rule — to seek additional loan data and feedback on potential litigation costs for lenders, the CFPB is required under federal law to have the rule finalized by January.
"We believe that convening a targeted [small business] panel to address the important issues raised in the re-opened comment period will not compromise CFPB's statutory deadline for finalizing the rule," the letter said.