There has been a lot of discussion lately regarding the Dodd-Frank Wall Street Reform Act and Consumer Protection Act. These regulatory acts established in 2010 under the Obama administration are among the many issues that are currently heavily split between political lines.
New Legislation Under Vote
Recently, the House of Representatives voted to repeal many of the strict regulations enacted by the Dodd-Frank and Consumer Protection Act. With Congress holding a Republican majority, they are pushing hard to dismantle certain parts of these acts while enacting their own new legislation.
The Senate vote is expected to be tighter, as some Democrats will need to be swayed to achieve the 60 votes necessary to pass what they are calling the Financial Choice Act. For the record, not one Democrat in the House supported it while all but one Republican Representative did.
About the Financial Choice Act
The Financial Choice Act is designed to reduce regulations against financial institutions that affect consumer credit, mortgages and other financial services. Republicans argue that Dodd-Frank was too strict and hindered economic growth. Democrats, on the other hand, feel that these regulations are necessary in order to prevent another financial crisis like in 2008.
In general, larger banks and financial firms have been against the Dodd-Frank Act, though it is heavily supported by consumer advocate groups. The original acts led to the creation of the Consumer Financial Protection Bureau (CFPB) to closely monitor activities by financial institutions. The Financial Choice Act would essentially strip the bureau of this ability.
Effects on the Mortgage Industry
As a mortgage company, we at Transparent Mortgage are keeping a close eye on this effort to repeal parts of Dodd-Frank and the Consumer Protection Acts and enact the Financial Choice Act. Political beliefs aside, any changes will again affect how we generate home loans for our clients.
In theory, the looser regulations may make it easier for people to get mortgage loans. However, our most important priority as a mortgage lender is to educate our clients and help them make the right financial decisions. The reason regulations were made stricter is because mortgages were too easy to get in the early 2000s and homeowners found themselves buying more than they could afford. It eventually came crashing down. This is something we want to avoid happening again in the future.
The Transparent Promise
Regardless of regulatory changes, the team at Transparent Mortgage will stay focused on doing what’s best for our clients. It’s all part of our commitment to transparency throughout the mortgage loan process.
To learn more about how the Dodd-Frank Wall Street Reform Act, Consumer Protection Act and the proposed Financial Choice Act will affect you getting a mortgage or refinancing your home, contact Transparent Mortgage today at (619) 929-0199.