House votes to amend Dodd-Frank rule

The House on Tuesday passed a measure to modify the qualified mortgage rule established by the 2010 Dodd-Frank financial overhaul to allow more rural counties to apply for certain loans.

Passed by voice vote, the bill would direct the Consumer Financial Protection Bureau to create an application process for communities to be designated as “rural.”

{mosads}The qualified mortgage rule excluded so-called “balloon loans,” which are not fully paid off over their terms, from a safe harbor except under certain circumstances. Currently, a creditor must offer less than 500 mortgages per year, own under $2 billion in assets and operate in a rural area to still attain qualified mortgage status.

The existing CFPB rule uses the Agriculture Department’s Urban Influence Code definition of rural. But bill sponsor, Rep. Andy Barr (R-Ky.), said that particular definition limits the availability of credit to some rural areas.

“Obviously, government bureaucrats don’t always know best. And they certainly don’t know our local communities better than we do,” Barr said.

Rep. Ruben Hinojosa (D-Texas) said that the measure would help rural communities gain access to more loans.

“We need to ensure that community banks and credit unions are not prevented from investing in such rural communities,” Hinojosa said.

Like previous attempts to amend Dodd-Frank, however, it is unlikely to get a vote in the Senate.