Defying the threat of a White House veto, the House on Wednesday afternoon passed bipartisan legislation to help homebuyers avoid delays and disruptions when closing on their new homes by a bipartisan vote of 303-121.
The bill, the Homebuyers Assistance Act, provides a four-month grace period for businesses that are working in good faith to comply with a new 1,888-page rule from the Consumer Financial Protection Bureau that went into effect Oct. 4.
“Without this bill, homebuyers could encounter delays and difficulties when they try to close on their homes,” said House Financial Services Committee Chairman Jeb Hensarling, R-Texas. “Buying a home is stressful enough, and bureaucratic delays should not add to their stress.”
The measure now goes to the Senate for consideration.
In May, 254 House members, including 92 Democrats, sent a letter to CFPB Director Richard Cordray asking for a formal grace period during the early stages of the new rule. Forty-one senators sent a similar letter.
“This legislation is important for credit unions as they work in good faith to comply with the TRID rule, which became effective October 3,” said Ryan Donovan, Credit Union National Association chief advocacy officer. “CUNA and other stakeholders repeatedly asked the CFPB to provide a formal hold-harmless period to ensure the rule has minimal impact on consumers and residential home mortgage closings. We thank the House for their quick action on this important issue and urge the Senate to do the same.”
Rep. French Hill, R-Ark., sponsored the bill, which passed the Financial Services Committee on July 29 on a bipartisan vote of 45-13, but it was also championed by prominent Democrats.
Rep. Brad Sherman, D-Calif., one of the co-sponsors of the bill, said the bill would help ensure access to mortgage credit during the hold-harmless period because it would allow small lenders to work toward full compliance without penalty.
Late Tuesday, the White House said that it would veto the Homebuyers Assistance Act, due for a vote on the House floor this afternoon.
"The CFPB has already clearly stated that initial examinations will evaluate good faith efforts by lenders. The Administration strongly opposes [the bill], as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the nation's financial stability," the White House said in its release.
“If the President were presented with H.R. 3192, his senior advisors would recommend that he veto the bill,” the statement says.
Here’s one opinion on why a veto would be inappropriate.