Below is a summary of the House-passed H.R. 4173 provisions that have been included in the Senate Wall Street Reform and Consumer Protection Act base text:

ACCESS ISSUES

Provisions from House bill accepted using House language or with technical changes

• Financial Services Oversight Council/ Systemic Risk Determination – makes additions that emphasize consideration of impact of regulatory policies and practices on low-income, minority or underserved communities.

• Regulatory considerations by the Federal Insurance Office expanded to include access to affordable insurance products by minorities, low- and moderate-income persons and underserved communities.  

• Several Consumer Financial Protection Board additions that address challenges faced by minorities and traditionally underserved communities.

• Mortgage Reform Bill provisions (see separate listing), including language to extend the sunset provision for the federal law protecting tenants in foreclosed properties from December 2012 to December 2014. 

Provisions from House Bill Modified.

• Offices of Minorities and Women Inclusion. Base text adopts House provisions with certain changes, particularly regarding Presidentially appointed and Senate confirmed directors, assessments of diversity efforts as part of an examination process of regulated entities, written assurances from contractors concerning diversity efforts, and termination of contracts. Offices provision moved from Title I of the bill to Title III, and no longer applies to the Federal Insurance Office.

• Specify that membership of the Consumer Advisory Board includes experts in civil rights, representatives of depository institutions that primarily serve underserved communities that have been significantly impacted by higher priced mortgage loans. Base text only specifies representatives of depository institutions that primarily serve underserved communities that have been significantly impacted by higher priced mortgage loans.

• Regulator mitigatory action required before systemic dissolution to avoid potential adverse effects that the default of the financial company would have on low-income, minority or underserved communities. Base text does not require mitgatory action but allows the above considerations as part of the FDIC’s Orderly Liquidation Plan.  

MORTGAGE LENDING

Provisions from House Bill Accepted.  The following provisions from House bill are included in base text as passed or with technical changes —

• Ability to Repay underwriting standard

• Net tangible benefit underwriting standard

• Requirement that the consumer agency issue anti-steering regulations for mortgage originators

• HOEPA provisions

• Prepayment Penalties

• Housing Counseling

• Multifamily Mortgage Program

• Appraisals and mortgage servicing

Provisions from House Bill Modified. The following provisions from the House bill have been revised in base text:

• Duty of Care.  A narrower provision than the House bill provides that mortgage originators (i.e., brokers and loan officers) be appropriately registered when selling mortgages and mark mortgages with unique mortgage registry identifiers. 

• Mortgage Originator Compensation/YSP Restrictions.  The Base Text merges the approaches of the House and Senate bills:

  • Clarifies that mortgage compensation can only be financed if all originator compensation is paid by the borrower (not third parties) and the borrower pays the entire fee by financing it. 

  • Permits compensation through rate for all mortgages as long as they meet the above standard (House bill only allowed this for Qualified Mortgages).

• Qualified Mortgage Safeharbor.  Base Text makes two changes to House definition of Qualified Mortgage—

  • Allows higher interest rate loans into safe harbor; and

  • Raises the points and fees limit in the safe harbor from 2% to 3% of the total loan amount and makes other changes to how points and fees are calculated.

• HUD/VA/AG/RHS/FHFA.  CFPB will have sole authority to define Qualified Mortgage and it must consult with HUD, VA, AG and RHS when issuing rules relating to the loans they guarantee and securitize.  Under House bill, these agencies plus FHFA (for Fannie and Freddie loans) had discretion to define qualified mortgage for these loans.

• Assignee/Securitizer Liability.  Base text strikes House assignee/securitizer liability provisions, instead modifying the House defense to foreclosure provision along the lines of the Senate bill, to allow damages incurred for the violations of the ability to repay and YSP standards to be set off in a foreclosure. 
  Liability for Creditors and Mortgage Originators. 

  • Creditors.  Creditors are subject to HOEPA damages, which include all interest charges and fees paid by the consumer for violating the ability to repay and YSP provisions.  They are liable for normal TILA damages (actual costs plus $400-$4000 for individual actions/1% class action) for violations of net tangible benefit, duties of care and anti-steering.  Deletes the House bill’s right of rescission.

  • Mortgage Originators.  Mortgage originators (i.e., individual mortgage brokers and loan officers) are subject to damages for violations of the compensation restrictions, duties of care and anti-steering provisions to no more than 3 times originator compensation.

THRIFT PROVISIONS

Provisions from House Bill Accepted. The following House provisions were adopted as Base Text, some modified as noted: 

• Preserving the thrift charter (uses Senate approach of HOLA instead of BHC Act to regulate S&LHC’s (House bill used BHC Act);

• Grandfathering OTS treatment of Mutual Holding Company dividends previously waived 

• Exempting limited purpose trust thrifts from holding company supervision;

• Establishing a Deputy Comptroller for thrifts (House initial language created Division of Thrift Supervision and a senior deputy comptroller);

• Strengthening the QTL test (dividend restrictions and fact that non-compliance may be enforced like other compliance violations; did not accept forcing thrift to convert to bank);

• Including thrifts in 10% deposit cap;

• Clarification of branching authority of thrifts that convert to banks (a amendment filed but not offered in the Senate) 

• House employee protections (with some modifications) are included in Base Text

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