Bankers and Community Groups Fight About Mortgage Legislation

The big issue right now in Congress is what will become the final outcome of a major bill to reform subprime lending and the rest of the mortgage industry.
One one side mortgage bankers are asking federal lawmakers to enact a national consumer protection standard that will simplify the lending and borrowing environment. On the other community groups say that consumer protection is best done at a local level. All of this discussion is centered around the Financial Services Committee passed bill on November 6th containing some preemption of state laws. Specifically, it extends some liability to secondary market investors who securitize subprime loans that don’t meet minimum standards.

“We cannot support a bill which does not provide broad national uniformity in the fight against predatory lending,” said Kieran Quinn, chairman of the Mortgage Bankers Association on the 7th Kieran added “We want a clear, national standard for lenders to adhere to and for consumers to hold lenders accountable to.”

David Parkhurst, the director and legislative counsel of the National Governors Association’s economic development and commerce committee things that “We’re looking for preservation of state authority to protect consumers and ensure solid markets for homeownership.” Parkhurst also said that “conditions are different in each state, therefore regulations and consumer protections need to be tailored to those needs.” “What happens in New England or Connecticut doesn’t necessarily happen in Nevada.”

To read more about preemptive strike states vs. feds in mortgage mess head on over to the Marketwatch.