The Community Mortgage Lenders of America created legislation to spur lending and preserve community lenders by eliminating over-burdensome regulations aimed for other parts of the market.

The Community Mortgage Lenders Act of 2013 attempts to free up resources for more lending while not compromising the overall goals of the Dodd-Frank Act.

According to the CMLA, the new legislation is comprised of a variety of exemptions, including community lenders being exempt from the 7-day waiting period requirement, the 3-day waiting period if terms improve for the consumer and Consumer Financial Protection Bureau examination authority (unless a referral comes from a state or federal regulator). 

Additionally, community lenders will be exempt from the additional capital requirements called upon by Basel III and relief from portions of current SAFE Act standard, the CMLA said. 

"While we all agree that consumers deserve protection from abusive products and practices, we remain deeply concerned that a 'one size fits all' approach will significantly disadvantage small, community-based lenders that did not create the meltdown, and don't have the resources to hire an additional staff to comply with rules aimed at larger institutions," said Mark McDougald of FirstTrust Mortgage and chair of the CMLA.