Portfolio Lending and Mortgage Access Act

Summary: Portfolio Lending and Mortgage Access Act (Sec. 2) This bill amends the Truth in Lending Act to allow a depository institution or credit union with assets below a specified threshold to forgo certain ability-to-pay requirements regarding residential mortgage loans. Specifically, those requirements are waived if a loan: (1) is originated by and continuously retained by the institution, (2) complies with requirements regarding prepayment penalties and points and fees, and (3) does not have negative amortization or interest-only terms. Furthermore, for such requirements to be waived, the institution must consider and verify the debt, income, and financial resources of the consumer. The bill also provides for circumstances in which&nbsp;such requirements&nbsp;shall be waived&nbsp;with respect to&nbsp;a&nbsp;loan that is&nbsp;transferred: (1) by reason of bankruptcy or failure of the originating institution, (2) to a similar institution, (3) in the event of a merger, or (4) to a wholly owned subsidiary of the institution. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Portfolio Lending and Mortgage 
Access Act''.

SEC. 2. MINIMUM STANDARDS FOR RESIDENTIAL MORTGAGE LOANS.

    Section 129C(b) of the Truth in Lending Act (15 U.S.C. 1639c(b)) is 
amended by adding at the end the following:
            ``(4) Safe harbor.--
                    ``(A) In general.--A residential mortgage loan 
                shall be deemed a qualified mortgage loan for purposes 
                of this subsection if the loan--
                            ``(i) is originated by, and continuously 
                        retained in the portfolio of, a covered 
                        institution;
                            ``(ii) is in compliance with the 
                        limitations with respect to prepayment 
                        penalties described in subsections (c)(1) and 
                        (c)(3);
                            ``(iii) is in compliance with the 
                        requirements related to points and fees under 
                        paragraph (2)(A)(vii);
                            ``(iv) does not have negative amortization 
                        terms or interest-only terms; and
                            ``(v) is a loan for which the covered 
                        institution considers, documents, and verifies 
                        the debt, income, and financial resources of 
                        the consumer in accordance with subparagraph 
                        (C).
                    ``(B) Exception for certain transfers.--
                Subparagraph (A) shall not apply to a residential 
                mortgage loan if the legal title to such residential 
                mortgage loan is sold, assigned, or otherwise 
                transferred to another person unless the legal title to 
                such residential mortgage loan is sold, assigned, or 
                otherwise transferred--
                            ``(i) to another person by reason of the 
                        bankruptcy or failure of the covered 
                        institution that originated such loan;
                            ``(ii) to an insured depository institution 
                        or insured credit union that has less than 
                        $10,000,000,000 in total consolidated assets on 
                        the date of such sale, assignment, or transfer, 
                        if the loan is retained in portfolio by such 
                        insured depository institution or insured 
                        credit union;
                            ``(iii) pursuant to a merger of the covered 
                        institution that originated such loan with 
                        another person or the acquisition of a the 
                        covered institution that originated such loan 
                        by another person or of another person by a 
                        covered institution, if the loan is retained in 
                        portfolio by the person to whom the loan is 
                        sold, assigned, or otherwise transferred; or
                            ``(iv) to a wholly owned subsidiary of the 
                        covered institution that originated such loan 
                        if the loan is considered to be an asset of 
                        such covered institution for regulatory 
                        accounting purposes.
                    ``(C) Consideration and documentation 
                requirements.--The consideration and documentation 
                requirements described in subparagraph (A)(v) shall--
                            ``(i) not be construed to require 
                        compliance with, or documentation in accordance 
                        with, appendix Q to part 1026 of title 12, Code 
                        of Federal Regulations, or any successor 
                        regulation; and
                            ``(ii) be construed to permit multiple 
                        methods of documentation.
                    ``(D) Definitions.--In this paragraph--
                            ``(i) the term `covered institution' means 
                        an insured depository institution or an insured 
                        credit union that, together with its 
                        affiliates, has less than $10,000,000,000 in 
                        total consolidated assets on the date on the 
                        origination of a residential mortgage loan;
                            ``(ii) the term `insured credit union' has 
                        the meaning given the term in section 101 of 
                        the Federal Credit Union Act (12 U.S.C. 1752);
                            ``(iii) the term `insured depository 
                        institution' has the meaning given the term in 
                        section 3 of the Federal Deposit Insurance Act 
                        (12 U.S.C. 1813);
                            ``(iv) the term `interest-only term' means 
                        a term of a residential mortgage loan that 
                        allows one or more of the periodic payments 
                        made under the loan to be applied solely to 
                        accrued interest and not to the principal of 
                        the loan; and
                            ``(v) the term `negative amortization term' 
                        means a term of a residential mortgage loan 
                        under which the payment of periodic payments 
                        will result in an increase in the principal of 
                        the loan.''.

            Passed the House of Representatives March 6, 2018.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.