Today, the House took up two bills aimed at weakening the Consumer Financial Protection Bureau.
The first bill was the Portfolio Lending and Mortgage Access Act.
It would expand a narrow exemption issued by the CPFB to all mortgage lenders, thereby encouraging banks to issue mortgages that borrowers cannot afford:
Here is a more detailed explanation of what the bill does:
H.R. 1210 would weaken one of the central achievements of Dodd-Frank intended to encourage financial institutions to issue only safe and sound mortgages that borrowers can afford to repay.
The bill would extend to all mortgage lenders a narrow exemption that was granted to only small financial institutions with respect to the Consumer Financial Protection Bureau’s landmark 2013 “Qualified Mortgage” rule (QM), also known as the “Ability to Repay” rule.
Under the 2013 CFPB rule, in order to be QM, the loan must not 1) be interest only or negatively amortizing, 2) have a term longer than 30 years, 3) be a no-income, no-documentation loan, 4) be a balloon loan, 5) have greater than 3% points and fees, 6) leave the borrower with a debt to income (DTI) ratio of greater than 43%. However, the rule allows small institutions to waive the DTI part of the QM test as long as they keep the loan in portfolio for the first three years of the life of the loan. Smaller financial institutions were granted this exemption because they have a demonstrated record of safer banking and because their relationship-based lending model often substantially reduces the risk of unsafe lending practices. H.R. 1210 would broaden the CFPB’s narrow exemption, potentially encouraging banks of any size, regardless of how well they know their customers, to issue mortgages that borrowers cannot afford.
It passed 255 to 174. 12 Democrats joined Republicans in voting for it, and one Republican—Jim Renacci (OH-16)—voted against it.
Here are the 12 Democrats:
Brad Ashford (NE-02)
Brendan Boyle (PA-13)
Jim Cooper (TN-05)
Jim Costa (CA-16)
Henry Cuellar (TX-28)
John Delaney (MD-06)
Gwen Graham (FL-02)
Collin Peterson (MN-07)
Kurt Schrader (OR-05)
David Scott (GA-13)
Kyrsten Sinema (AZ-09)
Filemon Vela (TX-34)
The White House has issued a veto threat for this bill.
The second bill was the Reforming CFPB Indirect Auto Financing Guidance Act.
This bill would eliminate regulatory instructions issued by the FPB in 2013 to combat a long-standing practice of car dealers and banks charging people of color more for car loans than white people with similar credit history.
Zach Carter of the Huffington Post explained this yesterday:
Banks allow car dealerships to issue car loans to their customers. A dealer sends a buyer's credit information to the bank, and then the bank tells the dealer the appropriate interest rate for a borrower with that particular financial profile. But dealers are given the authority to charge higher rates at their own discretion -- and the dealers themselves receive a cut of that higher lending price.
This arrangement creates incentives for both the dealership and the bank to inflate interest rates. Lawsuits dating back to the 1990s have shown not only that customers of color are more likely to be charged additional interest rates, known as "markups," but that their markup rates tend to be higher than those charged to white borrowers.
NAACP, the National Urban League, the National Council of La Raza, Americans for Financial Reform, and the U.S. Public Interest Research Group have all spoken out against the bill.
The White House opposes the bill but did not issue a formal veto threat.
It passed 332 to 96. 88 Democrats joined the Republican caucus in voting for it.
Here are the 88:
Pete Aguilar (CA-31)
Brad Ashford (NE-02)
Joyce Beatty (OH-03)
Ami Bera (CA-07)
Don Beyer (VA-08)
Sanford Bishop (GA-02)
Brendan Boyle (PA-13)
Bob Brady (PA-01)
Julia Brownley (CA-26)
Cheri Bustos (IL-17)
Matt Cartwright (PA-17)
Jim Clyburn (SC-06)
Gerry Connolly (VA-11)
Jim Cooper (TN-05)
Jim Costa (CA-16)
Joe Courtney (CT-02)
Joe Crowley (NY-14)
Henry Cuellar (TX-28)
John Delaney (MD-06)
Suzan DelBene (WA-01)
Debbie Dingell (MI-12)
Mike Doyle (PA-14)
Tammy Duckworth (IL-08)
Elizabeth Esty (CT-05)
Bill Foster (IL-11)
Tulsi Gabbard (HI-02)
Ruben Gallego (AZ-07)
Gwen Graham (FL-02)
Alan Grayson (FL-09)
Gene Green (TX-29)
Janice Hahn (CA-44)
Alcee Hastings (FL-20)
Denny Heck (WA-10)
Brian Higgins (NY-26)
Ruben Hinojosa (TX-15)
Jared Huffman (CA-02)
Steve Israel (NY-03)
Marcy Kaptur (OH-09)
Bill Keating (MA-09)
Dan Kildee (MI-05)
Derek Kilmer (WA-06)
Ron Kind (WI-03)
Ann Kirkpatrick (AZ-01)
Annie Kuster (NH-02)
Rick Larsen (WA-02)
Brenda Lawrence (MI-14)
Ted Lieu (CA-33)
Dan Lipinski (IL-03)
Dave Loebsack (IA-02)
Michelle Lujan Grisham (NM-01)
Ben Lujan (NM-03)
Jim McDermott (WA-07)
Grace Meng (NY-06)
Patrick Murphy (FL-18)
Rick Nolan (MN-08)
Donald Norcross (NJ-01)
Beto O’Rourke (TX-16)
Bill Pascrell (NJ-09)
Ed Perlmutter (CO-07)
Scott Peters (CA-52)
Collin Peterson (MN-07)
Mike Quigley (IL-05)
Kathleen Rice (NY-04)
Raul Ruiz (CA-36)
Tim Ryan (OH-13)
Loretta Sanchez (CA-46)
Adam Schiff (CA-28)
Kurt Schrader (OR-05)
David Scott (GA-13)
Terri Sewell (AL-07)
Brad Sherman (CA-30)
Kyrsten Sinema (AZ-09)
Albio Sires (NJ-08)
Louise Slaughter (NY-25)
Adam Smith (WA-09)
Jackie Speier (CA-16)
Eric Swalwell (CA-15)
Mike Thompson (CA-05)
Dina Titus (NV-01)
Paul Tonko (NY-20)
Norma Torres (CA-35)
Niki Tsongas (MA-03)
Juan Vargas (CA-51)
Marc Veasey (TX-33)
Filemon Vela (TX-34)
Tim Walz (MN-01)
Debbie Wasserman Schultz (FL-23)
Pete Welch (VT)
Note that this list includes the chair of the DNC, a vice-chair of the DNC, the chair of the DCCC, the former chair of the DCCC, two vice chairs of the Congressional Progressive Caucus, both Democratic Senate candidates in Florida, the leading Democratic Senate candidate in Illinois, the Democratic Senate candidate in Arizona, and a not-going-to-win Democratic Senate candidate in California.