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CHLA Comments on SAFE Act Parity – 2/4/13

The Community Home Lenders Association (CHLA)[1] appreciate the opportunity to comment on the proposed Rule 12 CFR Part 1026 amending Regulation Z (Truth in Lending) to implement amendments to the Truth in Lending Act (TILA) made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), specifically as it relates to loan originator licensing requirements between depository institutions, bona fide non-profit entities and non-depository institutions subject to the detailed requirements of the SAFE Act.
We understand that it is not the Bureau’s intent to propose the application of detailed requirements to depository institutions and non-profit organizations.  We respectfully request reconsideration of this position[2].  It is apparent the Bureau’s purpose with this proposal is to ensure consumer confidence that a loan originator maintains regulated, high standards of honesty and integrity.  We support this initiative.
As noted in the background material, “Because consumers generally take out a few home loans over the course of their lives, they often rely heavily on loan officers and brokers to guide them. But prior to the crisis, training and qualification standards varied widely…” The members of CHLA agree that prior to the crisis there were limited standards for loan officers, often varying state to state, and that a national repository for loan officer registration is an important first step in safeguarding consumers.  We also believe that specific educational requirements are beneficial if, and only if they are applied across the mortgage origination spectrum, irrespective of the financial structure of the firm the originator represents.


[1] Community Home Lenders Association (CHLA) is a newly formed entity by the former members of the Community Mortgage Banking Project (CMBP) representing the interests of independent and community mortgage bankers. For decades the community-based mortgage banker has delivered value and choice to consumers by leveraging local market expertise, quality service and lower costs for consumers.  CHLA supports financial market reforms that promote enhanced consumer access, consumer and investor transparency, consumer protection, local competition and choice.
[2] It has been questioned whether CFPB has the authority to amend certain rule-makings.  It is our belief that, in this instance, the exception authority under the Dodd-Frank Act is applicable.