Emmer Seeks to Help Small-Town Banks

Rep. Tom Emmer's new bill focuses on rolling back Dodd-Frank regulations.

Credit: Nick Youngson https://nyphotographic.com/

WASHINGTON – Minnesota Rep. Tom Emmer reintroduced legislation that would roll back regulations for community banks and credit unions.

The bill, Home Mortgage Disclosure Adjustment Act, relieves smaller banks from some of the provisions of the Dodd-Frank Wall Street Reform Act. Dodd-Frank was signed into law in 2010 by President Barack Obama as a response to the 2007-2008 financial crisis. In a press release, Emmer describes Dodd-Frank as a “one-size-fits-all regulatory scheme” that put unnecessary regulations on small banks and credit unions.

Emmer’s bill aims to amend Regulation C in the Home Mortgage Disclosure Act (HMDA). The regulation, put in place by the Consumer Financial Protection Bureau (CFPB), requires covered banks and credit unions to collect and report to the CFPB extra data points from loan applications they receive. Emmer says this rule is a “step too far.”

“There is a time and a place for regulation, but imposing new and unnecessary mandates and reporting requirements on our community financial institutions is most certainly a step too far,” Emmer said in a press release. “Not only are our small banks and credit unions being forced to close up shop, these stifling regulations are making it harder for entrepreneurs and American families to get the mortgages, car loans and the business financing they need.”

“Through my Home Mortgage Disclosure Adjustment Act, we will be able to cut red-tape and bring much needed regulatory relief to our local financial institutions so Americans can once again achieve the American Dream,” he added.

Emmer’s legislation would exempt community banks and credit unions from the requirements of Regulation C if they have:

  • 1,000 or fewer closed-end mortgages in each of the two previous calendar years; or have
  • 2,000 or fewer open-end lines of credit in each of the two previous calendar years

The National Association of Federally-Insured Credit Unions and the Independent Community Bankers of America (ICBA) endorsed the regulation exemptions.

Emmer introduced similar legislation last year which covered banks with 100 or fewer closed-end mortgages and 200 or fewer open lines of credit. The provisions would have exempted 3,400 community banks and credit unions from the reporting regulations of Regulation C. In the latest version of the bill, the exemption requirements were expanded to cover a significantly larger pool of small banks and credit unions.

In an endorsement letter, ICBA President Camden Fine praised Emmer’s legislation.

“H.R. 2954 [the Home Mortgage Disclosure Adjustment Act] would provide critical relief for low volume mortgage lenders without materially impacting the mortgage data available to the CFPB or impairing the purpose of the HMDA statute,” Fine said.

Christine Bauman