Creating Incentives for Small-Dollar Loan Originators
Section 401 · Sec. 401 ·
What this chapter is about
This part is about small home loans of $100,000 or less. A consumer agency must report on how the people who arrange home loans get paid. The report is due within 270 days. It must say whether the way they are paid keeps small loans from being made.
“The term ``small-dollar mortgage'' means a mortgage loan having an original principal obligation of not more than $100,000 that is-- (A) secured by real property designed for 1 to 4 dwelling units; and”
The section defines a small-dollar mortgage as a loan of no more than $100,000 secured by property designed for one to four dwelling units that is insured by the Federal Housing Administration, made, guaranteed, or insured by the Department of Veterans Affairs or the Department of Agriculture, or eligible to be bought or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
What the document actually says
“The term ``small-dollar mortgage'' means a mortgage loan having an original principal obligation of not more than $100,000 that is-- (A) secured by real property designed for 1 to 4 dwelling units; and”
That sentence, in plain words
The loan starts at one hundred thousand dollars or less. The home behind it holds one to four families.
What this is about
The loan must also have federal backing of some kind. Several agencies count. So does being fit for two big mortgage buyers.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Director of the Bureau of Consumer Financial ProtectionHow: statuteSec. 401 in the PDF
What the document says
“the Director shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on loan originator compensation practices throughout the residential mortgage market, including the relative frequency of loan originators being compensated--”
The section requires the Director of the Bureau of Consumer Financial Protection to report within 270 days of enactment to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services on how loan originators are paid across the home mortgage market. The report must cover how often they are paid by salary, by commission at a fixed percentage of the credit extended, by commission on some other basis, by a mix of salary and commission, by loan volume, and by commission with a floor or ceiling on pay.
What the document actually says
“the Director shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on loan originator compensation practices throughout the residential mortgage market, including the relative frequency of loan originators being compensated--”
That sentence, in plain words
A consumer agency must send a report to two committees in Congress. It covers how the people who arrange home loans get paid. It must say how often each way of paying is used.
What this is about
A loan originator is the person who sets up a home loan. Some get a salary. Some get a cut of the loan. The report counts each kind.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Director of the Bureau of Consumer Financial ProtectionHow: statuteSec. 401 in the PDF
What the document says
“(1) data and other analyses regarding the effect of the approaches to loan originator compensation described in subsection (b) on the availability of small-dollar mortgage loans; and (2) an analysis and a discussion regarding potential barriers to small-dollar mortgage lending.”
The report must include data and analysis on how the ways of paying loan originators affect the availability of small-dollar mortgage loans, and an analysis of the potential barriers to that lending. In preparing it, the Secretary must coordinate with federal agencies that regulate federally backed small-dollar mortgages and consult the Director of the Community Development Financial Institutions Fund, giving due consideration to how community development financial institutions pay their loan originators.
What the document actually says
“(1) data and other analyses regarding the effect of the approaches to loan originator compensation described in subsection (b) on the availability of small-dollar mortgage loans; and (2) an analysis and a discussion regarding potential barriers to small-dollar mortgage lending.”
That sentence, in plain words
The report must show what the ways of paying do to small loans. It must say whether fewer of them get made. It must also look at what else stands in the way.
What this is about
Small loans earn a small fee for the person who arranges them. That may be why few are made. The report must also cover community lenders.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The three things the section does: the definition of a small-dollar mortgage, the report on loan originator compensation practices, and the added duty to consider community development lenders and to cover the effect on small-dollar lending.
Nothing the section does is left out.
The section creates a reporting duty rather than amending an older statute. It names the National Housing Act and the Community Development Banking and Financial Institutions Act of 1994, neither of which is indexed here.
