Joint Comments to CFPB on Mortgage Fees RFI

To Whom It May Concern:

On behalf of the American Bankers Association, American Land Title Association, Broker Action Coalition, Consumer Bankers Association, Housing Policy Council, Independent Community Bankers of America, Leading Real Estate Companies of the World, Mortgage Bankers Association, Real Estate Services Providers Council, and The Realty Alliance (the Associations), we appreciate the opportunity to comment on the Consumer Financial Protection Bureau's (CFPB) Request for Information on Mortgage Closing Costs ("RFI"). Collectively, we represent companies across the consumer financial services landscape, and we share a common interest with the CFPB to serve consumers well in a properly regulated financial services market.

The Associations support the Bureau's interest in understanding the affordability challenges facing the housing market. It is regrettable that the CFPB is inaccurately characterizing certain fully disclosed, statutorily required and necessary mortgage-related fees as "junk fees" through blogs, circulars, advisory opinions, and public speeches. It is damaging for consumers and industry stakeholders alike to have the principal consumer financial protection regulator mischaracterize legitimate and fully disclosed fees associated with products and services that are of crucial financial utility and serve critical risk management purposes.

Principles & Considerations:

The purpose of this RFI is to gather information on "[t]he impact closing costs have on borrowers and the mortgage market, including the degree to which they add overall costs or otherwise cause borrower harm, and any impact such fees may have on the ability to purchase a home, anticipate and afford monthly payments, or refinance an existing mortgage." Information gathering is an essential predicate to future policy decisions by the Bureau. However, we believe more stakeholder outreach is necessary to ensure any solution that the Bureau pursues is properly supported by accurate information and facts. Although our organizations are also filing individual comments, we believe it is important to collectively make the following points:

i. Regulatory changes must adhere to statutory authority.

Any policy action resulting from this RFI must respect the letter and spirit of the legislative intent and framework set forth by Congress. For over 50 years Congress has determined that the best way to promote competition and consumer choice in the mortgage market – while also promoting rigorous consumer protection – is through disclosure-based laws and regulations. The authority to set or cap fees, or to require certain market arrangements, is not found in any of the statutes governing the mortgage origination process.

Download the joint comment letter to read the full text.