I 

115TH CONGRESS 

1ST SESSION H. R. 1964 

To preserve competition among mortgage lenders, provide relief from unnecessary regulatory requirements on responsible community mortgage lenders, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 5, 2017 

Mr. WILLIAMS introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To preserve competition among mortgage lenders, provide 

relief from unnecessary regulatory requirements on responsible community mortgage lenders, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Community Mortgage 

5 Lender Regulatory Act of 2017’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) Responsible community mortgage lenders 

2 engaged in traditional mortgage lending were not re3 sponsible for the recent mortgage crisis. 

4 (2) Responsible community mortgage lenders 

5 provide a valuable and critical service to consumers 

6 by, among other things, fulfilling the housing fi7 nance needs of the communities they serve and pro8 viding locally based alternative sources for mortgage 

9 financing. 

10 (3) The activities and business practices of re11 sponsible community mortgage lenders do not pose 

12 a substantial risk to consumers, and did not pose a 

13 substantial risk to consumers when the Dodd-Frank 

14 Wall Street Reform and Consumer Protection Act 

15 was enacted. 

16 (4) Responsible community mortgage lenders 

17 are subject to the oversight and control of various 

18 governmental authorities and nongovernmental ac19 tors, including the Bureau of Consumer Financial 

20 Protection, the Department of Housing and Urban 

21 Development, the Federal Trade Commission, State 

22 supervisory regulators, local government supervisory 

23 regulators, mortgage loan investors, warehouse lend24 ers, and various other authorities or entities. As a 

25 result of this oversight and control, the business 


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1 practices and activities of responsible community 

2 mortgage lenders are safe, transparent to the public 

3 and the government, and do not pose a threat to 

4 consumers, the public at large, the United States fi5 nancial markets, or the United States economy in 

6 general. 

7 (5) Responsible community mortgage lenders 

8 are unreasonably burdened by increasing regulation 

9 geared to problems that they did not create and ac10 tivities that they did not and do not engage in, and 

11 therefore responsible community mortgage lenders 

12 are entitled to relief from certain provisions of the 

13 Dodd-Frank Wall Street Reform and Consumer Pro14 tection Act and its attendant regulations, including 

15 the regulations of the Bureau of Consumer Finan16 cial Protection. 

17 (6) Without relief many responsible community 

18 mortgage lenders will be driven from the market 

19 thus limiting the consumer’s ability to choose a local 

20 lender for mortgage financing and dangerously con21 solidating the mortgage lending market into a small22 er number of lenders. 

23 (7) The preservation of responsible community 

24 mortgage lenders is critical to preserving competition 


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1 and preventing increasing concentration in mortgage 

2 lending. 

3 (8) The Bureau of Consumer Financial Protec4 tion should prioritize its resources and ability to 

5 carry out examinations by creating reasonable exclu6 sions for smaller, responsible mortgage lenders. 

7 SEC. 3. DEFINITIONS. 

8 Section 1002 of the Consumer Financial Protection 

9 Act of 2010 (12 U.S.C. 5481) is amended by adding at 

10 the end the following: 

11 ‘‘(30) COMMUNITY MORTGAGE LENDER.—The 

12 term ‘community mortgage lender’ means a lender— 

13 ‘‘(A) who— 

14 ‘‘(i) in the case of a depository insti15 tution or credit union— 

16 ‘‘(I) has assets of less than 

17 $2,000,000,000; and 

18 ‘‘(II) originated fewer than 

19 25,000 mortgage loans in the pre20 ceding calendar year or originated a 

21 gross mortgage loan origination vol22 ume of less than $5,000,000,000 in 

23 the preceding calendar year; or 

24 ‘‘(ii) in the case of a person other 

25 than a depository institution— 


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1 ‘‘(I) has net worth of less than 

2 $50,000,000; and 

3 ‘‘(II) originated fewer than 

4 25,000 mortgage loans in the pre5 ceding calendar year or originated a 

6 gross mortgage loan origination vol7 ume of less than $5,000,000,000 in 

8 the preceding calendar year; and 

9 ‘‘(B) had mortgage loan originations in the 

10 preceding three calendar years that consisted of 

11 95 percent qualified mortgages when measured 

12 by either— 

13 ‘‘(i) the number of mortgage loans 

14 originated; or 

15 ‘‘(ii) the dollar volume of mortgage 

16 loans originated. 

17 ‘‘(31) RESPONSIBLE COMMUNITY MORTGAGE

18 LENDER.—The term ‘responsible community mort19 gage lender’ means a community mortgage lender 

20 who has not been found by a court of competent ju21 risdiction to have violated the law, or been subject 

22 to a cease and desist order, relating to its mortgage 

23 loan originations— 

24 ‘‘(A) during the preceding two years; or 


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1 ‘‘(B) since such person began originating 

2 mortgage loans, if such period is less than two 

3 years. 

4 ‘‘(32) MORTGAGE LOAN.—The term ‘mortgage 

5 loan’ means a loan secured by a first lien on a 1– 

6 4 unit family residence. 

7 ‘‘(33) QUALIFIED MORTGAGE.—The term 

8 ‘qualified mortgage’— 

9 ‘‘(A) has the meaning given that term 

10 under section 129C(b)(2) of the Truth in Lend11 ing Act; and 

12 ‘‘(B) includes loans insured, guaranteed, or 

13 administered by— 

14 ‘‘(i) the Department of Housing and 

15 Urban Development, with regard to mort16 gages insured under the National Housing 

17 Act (12 U.S.C. 1707 et seq.); 

18 ‘‘(ii) the Department of Veterans Af19 fairs, with regard to a loan made or guar20 anteed by the Secretary of Veterans Af21 fairs; 

22 ‘‘(iii) the Department of Agriculture, 

23 with regard to loans guaranteed by the 

24 Secretary of Agriculture pursuant to secVerDate Sep 11 2014 01:15 Apr 13, 2017 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1964.IH H1964

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1 tion 502(h) of the Housing Act of 1949 

2 (42 U.S.C. 1472(h)); and 

3 ‘‘(iv) the Rural Housing Service, with 

4 regard to loans insured by the Rural Hous5 ing Service.’’. 

6 SEC. 4. PRIORITIZATION OF BUREAU EXAMINATION AND 

7 ENFORCEMENT AUTHORITY RESOURCES. 

8 (a) IN GENERAL.—The Consumer Financial Protec9 tion Act of 2010 (12 U.S.C. 5481 et seq.) is amended by 

10 inserting after section 1031 the following: 

11 ‘‘SEC. 1031A. EXCLUSION RELATING TO RESPONSIBLE COM12 MUNITY MORTGAGE LENDERS. 

13 ‘‘(a) LIMITATIONS OF EXAMINATION OF RESPON14 SIBLE COMMUNITY MORTGAGE LENDERS.—Except as 

15 permitted in subsection (b), the Bureau may not conduct 

16 any audit, examination, or investigation of, or take an en17 forcement action against, a responsible community mort18 gage lender. 

19 ‘‘(b) REFERRALS BY OTHER AGENCIES.— 

20 ‘‘(1) IN GENERAL.—The Bureau may conduct 

21 an audit, examination, or investigation of, or take an 

22 enforcement action against, a responsible community 

23 mortgage lender if requested by— 

24 ‘‘(A) a State or local regulator; 


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1 ‘‘(B) a Federal department or agency that 

2 guarantees mortgage loans originated, held, or 

3 serviced by such lender; 

4 ‘‘(C) the Federal Housing Finance Agency 

5 or entities supervised by such Agency; or 

6 ‘‘(D) any other Federal department or 

7 agency that exercises supervisory authority over 

8 such lender. 

9 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

10 apply to a responsible community mortgage lender 

11 that is a depository institution or a credit union. 

12 ‘‘(c) RULE OF CONSTRUCTION.—Nothing in this sec13 tion shall be construed as modifying, limiting, or super14 seding the operation of any provision of Federal or State 

15 law, or otherwise affecting the authority of any Federal 

16 or State department or agency other than the Bureau.’’. 

17 (b) CLERICAL AMENDMENT.—The table of contents 

18 under section 1(b) of the Dodd-Frank Wall Street Reform 

19 and Consumer Protection Act is amended by inserting 

20 after the item relating to section 1031 the following: 

‘‘Sec. 1031A. Exclusion relating to responsible community mortgage lenders.’’. 

21 SEC. 5. STREAMLINED VENDOR AUDITS. 

22 (a) IN GENERAL.—The Consumer Financial Protec23 tion Act of 2010 (12 U.S.C. 5481 et seq.), as amended 

24 by section 4(a), is further amended by inserting after sec25 tion 1031A the following: 


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1 ‘‘SEC. 1031B. VENDOR AUDIT REQUIREMENTS RELATING TO 

2 RESPONSIBLE COMMUNITY MORTGAGE 

3 LENDERS. 

4 ‘‘(a) VENDOR AUDITS.—The Bureau and the appro5 priate Federal banking agencies may only require a re6 sponsible community mortgage lender to perform an audit 

7 of a vendor or third-party contractor of the lender if the 

8 Bureau or the appropriate Federal banking agency, as ap9 plicable, has reasonable cause to believe that such vendor 

10 or third-party contractor is performing services for the 

11 lender in a manner that is causing the lender to violate 

12 the law.’’. 

13 (b) CLERICAL AMENDMENT.—The table of contents 

14 under section 1(b) of the Dodd-Frank Wall Street Reform 

15 and Consumer Protection Act, as amended by section 

16 4(b), is further amended by inserting after the item relat17 ing to section 1031A the following: 

‘‘Sec. 1031B. Vendor audit requirements relating to responsible community 

mortgage lenders.’’. 

Æ 


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