This year marks the year in which lenders have seen rules passed regarding major, Dodd-Frank-mandated regulatory standards. The qualified mortgage underwriting guidelines and qualified residential mortgage capital requirements provided much needed clarity and certainty for the mortgage industry. While these announcements checked off two of the more prominent rulings from Dodd-Frank, new industry-wide legislation and regulations are far from over. According to law firm Davis Polk & Wardwell, as of October 1, 2013, there are still 121 rules mandated by Dodd-Frank that have not even been proposed yet—nearly a third of the rules mandated by the law.
As the Consumer Financial Protection Bureau, Congress and other rule-making bodies get around to finalizing the remaining rules—and rules that fall outside Dodd-Frank but may arise in response to changes in the marketplace—it is a lender’s responsibility to educate themselves on pending new regulations, and how the definitions of those rules could affect their customers and their business.
But what steps need to be taken to ensure that rule makers receive accurate information from lenders on the real ramifications to both the industry and the consumer?
1. Lenders need to communicate with lawmakers, agencies and their local congressional representatives and senators to make them aware of their interests and concerns, as well as the impact on consumers. Understanding the impact laws and new rules have on consumers’ decisioning enables lenders and other mortgage companies to address consumer concerns first, facing issues head-on. Lenders’ ties with political affiliations and government constituents can open up opportunities for lenders to directly express their thoughts, as well as their consumers’ thoughts, ushering in a much-needed era of transparency. Contact representatives on the Houses’ website or senators on the Senate’s website.
2. The MBA’s Mortgage Action Alliance is a voluntary and non-partisan grassroots lobbying network of real estate finance industry professionals. Enabling participants to speak directly with members of Congress, state legislators and federal regulators, MAA leverages the influence of the mortgage industry’s largest association to provide some level of access to decision makers. “If you’re a voter, employer or constituent, your voice matters,” reads the MAA website. An additional bonus to get involved is that participants don’t have to be a member of the MBA to enroll. Like the MAA, other mortgage companies have taken up the fight to ensure their, and their customers’, voices are heard on a national level.
3. The U.S. Chamber of Commerce represents more than three million businesses of all sizes, utilizing its members, volunteers and organizations to develop and implement policies on major issues affecting businesses. Local Chambers of Commerce, as well as the national Chamber of Commerce, aim to work with everything from mom-and-pop businesses to major corporations in order to propel employment and advance the agenda of all American businesses.
4. Lenders must educate themselves using everyday tools to ensure they are up to speed on the industry’s latest news. Something that is relatively self-explanatory can sometimes be overshadowed by bigger issues; however staying informed will help lenders prepare for changes as far in advance as possible.
Lenders must be compelled to further their political education and involvement, as well as share it, in order to ensure consumers’ safety and opportunities are protected regardless of changes in Washington or the industry. Consumers are impacted—positively or negatively—each day due to regulatory and financial reform; it’s up to lenders as to which impact will affect their customers.
