Dems praise Fed handoff to Consumer Protection Bureau
The Hill – Democratic lawmakers are hailing a recent move by the Federal Reserve to hand over certain mortgage rulemaking authority to the new Consumer Financial Protection Bureau (CFPB).
On Tuesday, the Fed announced that it would not be finalizing three proposed rules detailing when homeowners can escape predatory loans.
Since the the CFPB is scheduled to assume jurisdiction on this issue when it officially comes into being in July, the Fed determined it would "not be in the public interest" for it to finalize its take on the rules, according to Tuesday's announcement.
Instead, the Fed will allow its proposals to languish, allowing the CFPB to step in once it is created. That bureau, being crafted by Harvard law Professor Elizabeth Warren, is shaping up to be a strong advocate for consumer interests.
Democrats had criticized the Fed's proposal as making it too difficult for non-wealthy homeowners to escape loans that do not meet the standards laid out in the Truth in Lending Act. Under the Fed's proposal, a borrower would have to repay the entire mortgage before a creditor must cancel the security interest in the home.
