St Casimirs Mortgage Minute

ICBA’s Fine: The Fair Lending Inquisition Is a New Regulatory Low


Conflicting rules on fair lending and “qualified mortgages” might represent a new low in the history of regulatory doublespeak, ICBA President and CEO Cam Fine wrote. In his latest blog post, Fine wrote that new rules from the Department of Housing and Urban Development and Consumer Financial Protection Bureau put lenders in a no-win situation.

HUD’s fair lending rules could expose community banks to disparate impact legal actions if they choose to only make CFPB-approved “qualified mortgage” loans, Fine wrote in Finer Points. This could mean community banks not violate one regulation while trying to comply with another, he wrote.

Instead of burdening community banks with overwhelming and contradictory regulations, Fine wrote, policymakers should encourage their symbiotic relationships with customers and communities.

“How can we promote lending decisions that are not excessively risky but also support loans to homebuyers who aren’t perfect on paper?” Fine wrote. “Well, just off the top of my head, maybe we should support the relationship lenders out there who meet face-to-face with borrowers to determine their qualifications and potential risks.”