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114th Congress   }                                        {     Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                        {    114-278

======================================================================



 
                       HOMEBUYERS ASSISTANCE ACT

                                _______
                                

October 1, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3192]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3192) to provide for a temporary safe harbor 
from the enforcement of integrated disclosure requirements for 
mortgage loan transactions under the Real Estate Settlement 
Procedures Act of 1974 and the Truth in Lending Act, and for 
other purposes, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                          PURPOSE AND SUMMARY

    Introduced by Representative Hill, the Homebuyers 
Assistance Act provides a temporary legal safe harbor (until 
February 1, 2016) from enforcement of the Bureau of Consumer 
Financial Protection's (``CFPB's) TILA-RESPA Integrated 
Disclosure Rule set to take effect October 3, 2015, as long as 
a good faith effort is made to comply with the rule.

                  BACKGROUND AND NEED FOR LEGISLATION

    On November 20, 2013, the CFPB finalized the TILA-RESPA 
Integrated Disclosure Rule (TRID), which combined certain 
disclosures that consumers receive in applying for and closing 
on a residential mortgage loan, including disclosures required 
under the Truth in Lending Act (TILA) and the Real Estate 
Settlement Procedures Act (RESPA). The new disclosures are 
generally referred to as the ``combined'' or ``integrated'' 
disclosures. The TRID applies to most closed-end consumer 
mortgages and includes a number of substantive changes and 
additions to RESPA and TILA. The final rule was originally to 
become effective for mortgage applications received on or after 
August 1, 2015.
    The TRID requires loan originators who receive an 
application to provide consumers a loan estimate form that 
combines the initial TILA disclosure and the Good Faith 
Estimate. The rule also requires loan originators to provide 
consumers a Closing Disclosure form, which combines the final 
TILA disclosure and the HUD-1 Settlement Statement, at least 
three business days prior to consummation of the mortgage. The 
TRID also imposes record retention requirements and restricts 
mortgage originators from imposing certain fees, providing 
estimates, or requiring consumers to verify information before 
providing consumers with a Loan Estimate form.
    On January 20, 2015, the CFPB promulgated a series of 
amendments to the TRID, including:
    1. An extension of the time frame to issue a revised Loan 
Estimate when an interest rate moves from floating to locked 
from one to three business days, and
    2. A provision allowing for the disclosure that a creditor 
has reserved its right to issue a revised Loan Estimate for 
loans funding new construction.
    While intended to streamline the current duplicative 
disclosure regime under TILA and RESPA, the TRID poses 
significant implementation and compliance challenges because it 
increases the number of disclosures mortgage lenders must 
provide. The TRID also makes significant changes to the 
origination, processing, and closing of mortgage loans; 
requires business decisions at all stages of the transaction; 
and includes difficult-to-understand timing and delivery 
requirements and other practical implementation issues that go 
beyond the form content requirements.
    On May 14, 2015, the Subcommittee on Housing and Insurance 
held a hearing entitled ``TILA-RESPA Integrated Disclosure: 
Examining the Costs and Benefits of Changes to the Real Estate 
Settlement Process,'' at which industry stakeholders testified 
on their efforts to comply with the TRID rule. During the 
hearing, a bipartisan group of Committee members expressed 
support for a hold-harmless period that extends until the end 
of the year. Additionally, a bipartisan group of nearly 300 
Senators and House Members have written to the CFPB asking for 
a formalized hold harmless period.
    On June 17, 2015 Director Cordray announced that the CFPB 
would delay the effective date of the TRID, citing an 
``administrative error.'' The error was failing to timely file 
a report with Congress pursuant to the Congressional Review 
Act, which requires the filing of a rule report and stays the 
effective date of any rule for 60 days pending Congressional 
review. Because the CFPB did not file the required report until 
June 16, 2015, the Act stayed the effective date past August 1, 
the date specified in the CFPB's final rule. On July 21, the 
CFPB issued a revised final rule moving the effective date to 
October 3, 2015.

                                HEARINGS

    The Committee on Financial Services' Subcommittee on 
Housing and Insurance held a hearing examining matters relating 
to H.R. 3192 on May 14, 2015. In addition, the full Committee 
held a hearing on September 29, 2015, at which matters relating 
to the bill were discussed.

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
July 28, 2015 and July 29, 2015, and ordered H.R. 3192 to be 
reported favorably to the House without amendment by a recorded 
vote of 45 yeas to 13 nays (Record vote no. FC-50), a quorum 
being present.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole vote in committee was a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 45 yeas to 13 nays 
(Record vote no. FC-50), a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee, based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 3192 
will facilitate the orderly implementation of the TILA-RESPA 
Integrated Disclosure Rule while reducing compliance risk for 
regulated entities by providing such entities with a temporary 
safe harbor provided they make a good faith effort to comply 
with the Rule's disclosure requirements.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 CONGRESSIONAL BUDGET OFFICE ESTIMATES

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 28, 2015.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services, House of Representatives, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3192, the 
Homebuyers Assistance Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 3192--Homebuyers Assistance Act

    The Dodd-Frank Wall Street Reform and Consumer Protection 
Act (P.L. 111-203) directed the Consumer Financial Protection 
Bureau (CFPB) to develop a rule that combined certain 
disclosures that mortgage lenders must make under the Truth in 
Lending Act and the Real Estate Settlement and Procedures Act. 
The CFPB has completed that rulemaking; the final rule will 
become effective on October 3, 2015. H.R. 3192 would establish 
February 1, 2016, as the new effective date for the new rule. 
During the time between the date of enactment of the bill and 
the new effective date, lenders would not be liable for 
violations of the integrated disclosure requirements so long as 
they made a good faith effort to comply with the requirements.
    Based on information from the CFPB, CBO estimates that 
enacting H.R. 3192 would affect direct spending; therefore, 
pay-as-you-go procedures apply. However, we expect those 
effects would be negligible because the agency has completed 
the required rulemaking and the delay would have a minor effect 
on the agency's workload. Enacting H.R. 3192 would not affect 
revenues. Implementing the bill would not affect discretionary 
costs because the CFPB is permanently authorized to spend 
amounts transferred from the Federal Reserve System.
    H.R. 3192 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Susan Willie. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates reform 
Act.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    H.R. 3192 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee states that no provision of H.R. 3192 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   DISCLOSURE OF DIRECTED RULEMAKING

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee states that H.R. 3192 does not require any 
directed rulemakings.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Provides that the Act may be cites as the ``Homebuyers 
Assistance Act.''

Section 2. Enforcement safe harbor

    Provides that the integrated disclosure requirements under 
section 4(a) of RESPA, section 105(b) of TILA, and regulations 
issued under such sections may not be enforced against any 
person until February 1, 2016, and no suit may be filed against 
any person for a violation of such requirements occurring 
before such date, so long as such person has made a good faith 
effort to comply with such requirements.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    H.R. 3192 does not amend any section of a statute. 
Therefore, the Office of Legislative Counsel did not prepare 
the report contemplated by clause 3(e)(1)(B) of rule XIII of 
the House of Representatives.

                             MINORITY VIEWS

    Clarifying and combining the required disclosure forms for 
the Truth in Lending Act and the Real Estate Settlement 
Procedures Act has been a shared goal of the mortgage lending 
industry and consumer advocates for many years. The Dodd-Frank 
Act required the Consumer Financial Protection Bureau (CFPB) to 
use its expertise to solve this problem, and create a unified 
form that would work for consumers and the industry. Everybody 
agrees that the CFPB has succeeded in that goal.
    When the CFPB promulgated its Ability-to-Repay rule and 
defined the terms of Qualified Mortgages, CFPB Director Cordray 
assured the industry, and especially smaller banks and lenders, 
that the Bureau would not aggressively enforce technical 
mistakes, and that they would strongly consider good-faith 
efforts to comply with the new rules before bringing any 
actions.
    Similarly, in the implementation of the new disclosures, 
Director Cordray has made many comments to assuage industry 
concerns. He has assured lenders, service providers and 
Congress that good faith efforts to comply with the new rules 
will be an important consideration under the enforcement regime 
for several months into next year. The Bureau has also extended 
the deadline for implementation by two months in order to 
provide industry with a chance to modify its compliance 
operations. The CFPB's website also has numerous materials to 
assist small businesses in training their employees and 
adopting new compliance practices. The Bureau has indicated in 
every way possible that it intends to work cooperatively with 
industry to meet the shared goal of adopting shorter, simpler, 
easier to understand disclosures for mortgages.
    For these reasons, it is unnecessary for Congress to 
micromanage the CFPB's supervision and enforcement decisions, 
which is one of the goals of this bill.
    H.R. 3192 would also have a detrimental impact on American 
homebuyers. The Truth in Lending Act provides borrowers an 
opportunity for recourse through the courts if a lender acts in 
bad faith and fails to disclose or obscures important 
information to the borrower. These rights are crucial for 
protecting consumers that likely are making one of the biggest 
financial commitments of their lives: buying a home. This bill 
would eliminate that right for all borrowers during the hold 
harmless period. Stripping back this consumer protection could 
have a profound impact on consumer safety, mortgage 
applications, and the broader economy.
    The Truth in Lending Act already provides limited liability 
for disclosure related violations and allows lenders to cure 
errors made in good faith. While most lenders are acting in the 
best interests of the borrower, there are a small number of bad 
actors who can have an enormously costly impact on their 
victims. A small but important amount of private litigation is 
brought under TILA protections in these cases, which promotes 
trust in the mortgage lending system.
    Removing these important protections for all loans 
originated in the proposed period could discourage all 
borrowers, potentially stalling the nascent recovery in housing 
markets.

                                   Maxine Waters.
                                   Carolyn B. Maloney.

                                  [all]