Homebuyers Assistance Act

Floor Speech

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Mr. SHERMAN. Mr. Speaker, back in the old days, this bill would have just passed on suspension. It is bipartisan, it is small, and it is temporary. Both sides have praised the CFPB's efforts in coming out with this rule. Both sides believe in a grace period, and the question before us is whether we should codify that grace period and apply it to trial lawyer enforcement, or whether we should have it be more vague than the chairman would want, and whether this grace period should apply to private enforcement or only government enforcement.

Mr. Speaker, 91 Democrats called for this grace period. Half the Democrats on the committee voted for the bill. The bill applies only until the end of January. It is small, it is temporary, and it applies only to lenders who operate in good faith. I said until the end of January. Some would say it applies until February 1. Either way, it is a temporary bill.

I know the pressure the Democrats are under. Anybody who shows up at Democratic club meetings, they are thinking that any bill, no matter how small, temporary, or practical, that is favored by the financial services industry must be a complete sellout to banks. Well, as one of the leaders against the $700 billion TARP bill, I can go to any Democratic club holding my head up high even if I vote for bills that are practical and yet may clash with some ideology.

The CFPB recognized the importance of this grace period, saying in the letter of October 1:

We recognize that the industry needs to make significant systems and operational changes.

They document all those changes and review them. That is why they provide for a grace period which they have indicated may last longer than 4 months. So why are smaller participants in the industry, small escrow companies and small lenders, backing away, abandoning consumers to only the biggest who know how to comply with this complicated 1,888-page regulation without worrying about a period of a shakedown cruise to get organized? Why? Because although they have got the restrained administrative enforcement that has been praised, they don't have the restrained trial lawyer enforcement.

This bill effectuates what the CFPB is trying to do: let people go, do a shakedown cruise, make sure that things operate correctly, and do so knowing that if they act in good faith, they won't face retribution. But the CFPB can do that only with regard to governmental enforcement. It is up to this Congress to make sure that it applies to private enforcement. That is the purpose of this bill.

Let us achieve the purpose that the CFPB had when they issued their letter of October 1. Let us make sure that those who act in good faith will not face retribution. Let us make sure that the smaller mortgage lenders and smaller escrow companies can continue to operate if they try to do so in good faith. Let us not hand a huge competitive advantage to those players in the industry that have the most lawyers and the most sophisticated computer programmers.

If we are going to have a grace period, it needs to apply to both private enforcement through lawsuits as well as public enforcement through the CFPB. That is why I hope that Members will vote for this bill.

Madam Speaker, I enter into the Record this letter of October 1.

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Mr. SHERMAN. I do want to quote out of it. The CFPB recognizes that ``the mortgage industry has needed to make significant systems and operational changes to adjust to the requirements of the Rule.''

It goes on to set forward why we need this grace period; and we need to make sure the grace period applies to both private and public enforcement.

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