Washington Report

Advocacy Updates from Washington D.C.

NAR Comments on FCA

On July 11, 2016, NAR sent a letter to U.S. House Financial Services Committee Chairman Jeb Hensarling (R-TX), thanking him for including several provisions of interest to NAR in the "Financial Choice Act" (FCA). This 500-page legislation makes a number of reforms to the Dodd-Frank Act aimed to increase transparency, accountability and fairness within the federal regulatory agencies. It also represents a significant shift in the Republican policy position regarding the Dodd-Frank Act (Act). Since the passage of the Dodd-Frank Act, Republican's generally have called for a full repeal of the legislation. While the proposal is not expected to advance as a stand-alone bill this year, it will likely become a benchmark for future reforms.

Notable provisions within the FCA include:

  • Modification to the Truth in Lending Act's (TILA) definition for "points and fees" to allow for greater consumer choice in mortgage and settlement services under the Ability to Repay/Qualified Mortgage (QM) rule;
  • Clarification for the difference between manufactured housing producers and loan originators to ensure low-dollar manufactured housing loans are exempt from the Home Ownership and Equity Protection Act (HOEPA);
  • Ensure regulators perform a rigorous cost benefit analysis prior to promulgation of any rules (regulators must also receive Congressional approval on all "major" rulemakings and perform retrospective reviews of all regulations);
  • Repeal the requirement that reviewing courts defer to CFPB interpretations where in conflict with statutory interpretations of other agencies;
  • Create a "Small Business Advisory Board at the Consumer Finance Protection Bureau (CFPB) and a "Small Business Capital Formation Advisory Committee within the Securities and Exchange Commission (SEC); and
  • Language that allows for increased participation in and a greater flow of capital through crowdfunding.

NAR is pleased that the FCA includes provisions that will enhance transparency, accountability and fairness in our financial system. As a result, the FCA will help expand financial product choice and promote economic opportunity. These provisions are an important step towards making property ownership a reality for hardworking Americans and U.S. businesses.

Read NAR's Letter