Portfolio Lending and Mortgage Access Act

To amend the Truth in Lending Act to provide a safe harbor from certain requirements related to qualified mortgages for residential mortgage loans held on an originating depository institution’s portfolio, and for other purposes. 1. Short title This Act may be cited as the Portfolio Lending and Mortgage Access Act 2. Minimum standards for residential mortgage loans Section 129C(b) of the Truth in Lending Act ( 15 U.S.C. 1639c(b) (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 (ii) the term insured credit union 12 U.S.C. 1752 (iii) the term insured depository institution 12 U.S.C. 1813 (iv) the term interest-only term (v) the term negative amortization term February 23, 2018 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

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 such requirements shall be waived with respect to a loan that is 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.