The House Financial Services Committee has passed seven bipartisan laws related to the financial services industry, two of which are directly related to home finance. The Homebuyer Assistance Act (HR 3008) and The Law on Financial Integration into Banking (HR 1711).
HR 3008, sponsored by Rep. Brad Sherman, Chair of the Investor Protection and Capital Markets Subcommittee and Rep. Van Taylor, makes it easy for home buyers to purchase a home on a Federal Housing Administration (FHA) mortgage. The Homebuyer Assistance Act of 2021 would reduce a number of hurdles that appraisers currently face before being allowed to provide appraisals on FHA mortgage-funded home purchases. The federal standards set for FHA appraisers would be aligned with the federal minimum requirements already in place for other home equity mortgages, particularly those acquired by Fannie Mae and Freddie Mac.
“Buying a home is already difficult enough for low-income first time buyers and minority homebuyers. You don’t need the added challenge of finding a certified assessor, ”said Rep. Sherman. “This legislation is a sensible overhaul of the current valuation requirements that will make FHA mortgages accessible to more Americans.”
The Home Buyer Assistance Act would help address the current shortage of certified appraisers that some parts of the country are currently facing. In a 2017 survey, nearly 75% of reviewers said regulatory burdens were a top reason they’d leave the field. In addition, this lack of FHA-insured mortgage appraisers has a disproportionate impact on first-time buyers, low- and middle-income households, and people of color. More than 83% of FHA mortgages were for home purchases in 2020 received from first-time buyers and over a third of all FHA loans were received by minority households.
HR 1711, a non-partisan law led by Rep. David Scott, is designed to empower the Bureau of Community Affairs in the Bureau of Consumer Financial Protection (CFPB) to lead coordination with other agencies to investigate barriers to accessible bank resources and best practices to increase of consumers identify participation in underinvested communities.
“For too long the federal government has ignored the difficulties of unbanked consumers, many of whom have been systematically banned from participating in our banking system,” said Rep. Scott. “From exorbitant fees for cashing every paycheck to wrong decisions made by predatory lenders, unsanitary consumers routinely rely on exploitative services that steal money from the people who can least afford it. The Financial Inclusion In Banking Act will begin identifying and developing solutions needed to fill the long-standing gaps in access to banking for underinvested groups and to ensure that every American has a fair look at capacity opportunities and has the resources necessary to build wealth and achieve financial stability. ”
The Banking Financial Inclusion Act would address the CFPB Community Affairs Bureau to:
- Conduct research to identify the barriers bank and bankless consumers face in maintaining sustainable relationships with custodians.
- Directing coordination within the CFPB with trade associations, consumer groups, civil rights groups, and other federal agencies and departments in assessing factors hindering financial inclusion.
- Identify strategies for improving financial literacy.
- Submit a report to Congress every two years highlighting legislative and regulatory recommendations to encourage participation in the traditional banking system.