(Dennis J. Wall)
The Consumer Financial Protection Bureau has proposed a new rule that would contradict what Congress wrote in the Dodd-Frank Act. They don't have the votes in Congress. So, they are trying to make law in proposed rules like this one. Comments are due by September 28, 2020.
Injustices like this must be opposed. The success is in the opposition, not always in the result. Feel free to use, paraphrase, or rephrase my own Comments below. I was inspired by a National Consumer Law Statement on this proposed new rule, myself. The important point is that proposed new rules like this one must be opposed. If using my language is inspiration, too, for you to leave your own Comments in opposition, that is all to the good.
To rephrase the writer and philosopher Albert Camus who wrote about actions during a Plague among other things, this may be a country now in which people suffer. We may not be able to do anything about that at the moment. But we can lessen the number of suffering people. If you do not help in this effort, who will?
The CFPB's Notice of Proposed Rulemaking is on www.regulations.gov where you can leave your Comments. The docket number is CFPB-2020-0028. The RIN is 3170-AA98. To say again, Comments are due by September 28, 2020.
Thank you.
This rule proposed by the CFPB would immunize lenders from legal liability for making mortgage loans without regard to borrowers’ ability to repay if the borrower remains current for the first three years of the loan and the loan meets other requirements. This proposed new rule and new immunity for lenders is contrary to the Dodd-Frank Act.
In the Dodd-Frank Act, Congress required that before booking a loan so to speak, that lenders must make a good faith determination of a borrower’s ability to repay it. Further, Congress expressly allowed borrowers to defend foreclosure by asserting a defense that the lender ignored the borrower’s lack of ability to repay in making the loan.
There are many reasons a homeowner can make payments even for years and even when their mortgage is unaffordable. Examples drawn from real-world experience have been reported including "payments from roommates who are not on the mortgage, borrowing money, or even going without essentials such utilities or medical care." The Congressional choice to enact protections to homeowners to save their homes in the Ability-to-Repay rule already contemplated this situation and allowed for it. That is a policy choice. It is the policy choice made by Congress in the statutes that make up Dodd-Frank. No mere administrative agency including the CFPB has authority to repeal statutes, and no mere agency including the CFPB has the power to enact this proposed rule.
Congress wrote the Ability-to-Repay rule to prevent market excesses that contributed to the Great Recession. Many communities, especially low-income neighborhoods and communities of color, still have not recovered from the Great Recession. It is never a good idea to induce a Second Great Recession, but it is particularly not a good idea during a Pandemic.
Thank you.
Please read the disclaimer. ©2020 Dennis J. Wall. All rights reserved.
Comments