ABA, associations recommend CFPB advance with mortgage regulation reforms

ABA and several other trade groups are backing the CFPB’s new mortgage-regulation reform agenda, while urging the Bureau to prioritize finalizing existing rulemakings and to focus changes on cost, complexity, and community-bank relief.

What the ABA article is about

The piece reports that the American Bankers Association (ABA), together with four other associations, sent a joint letter supporting reforms to how the CFPB regulates mortgage origination and servicing. The letter responds to a March executive order from President Trump directing CFPB to change its approach to Truth in Lending Act (TILA) enforcement and mortgage rules to reduce costs and broaden access to credit.

Key recommendations to the CFPB

The associations support modernizing “Dodd‑Frank Act requirements” they see as raising origination and servicing costs without matching consumer benefit, but ask CFPB to first complete pending rulemakings before layering on new targeted reforms. Their specific asks include:

• Modernize Regulation Z so loan originators can reduce their compensation in more situations, which today is tightly constrained by LO comp rules.

• Reform disclosure requirements to borrowers under TILA/Reg Z to cut operational complexity and regulatory uncertainty in the origination process.

• Update Home Mortgage Disclosure Act (HMDA) reporting thresholds so that smaller banks and credit unions get more relief, aligning with the executive order’s focus on community/smaller institutions.

Servicing and loss‑mitigation focus

The letter emphasizes that “well‑crafted servicing regulations” can materially reduce costs and barriers that currently limit servicers’ ability to deliver timely, streamlined loss‑mitigation options to borrowers in hardship. In effect, the groups are arguing that better‑calibrated servicing rules can both lower compliance burden and improve outcomes for distressed borrowers.