Providing for Consideration of H.R. 3192, Homebuyers Assistance Act

Floor Speech

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Ms. MAXINE WATERS of California. Mr. Speaker, I would like to thank the gentleman from Massachusetts (Mr. McGovern), a member of the Rules Committee, for the defense that he is putting up relative to my amendment.

Yes, I went to the Rules Committee, and, yes, I attempted to have an amendment that would protect our consumers. So it is clear that the opposite side of the aisle did not want the public to know about this amendment.

Why didn't they want this amendment debated? It is because they know that our consumers need to have the kind of protection that would allow them to go into court and raise questions about whether or not they are being defrauded, they are being misled, they are not being told the truth when they close on these mortgage deals.

Because the Rules Committee decided that we could not have a debate on my amendment, we have to take every opportunity to try to unveil why they are keeping this amendment down, why they don't want to debate it. As a matter of fact, I am so surprised that my colleague on the opposite side of the aisle tried to make this sound as if the Democrats didn't want a grace period, that we didn't want a hold harmless period. That is absolutely not true.

We agreed with Mr. Cordray, who heads the Consumer Financial Protection Bureau, that there should be a grace period. We understood when the industry talked about the fact that they had a lot of work to do to make sure that they got the right forms, that they trained their people, that they came in compliance with the new rules that were created under Dodd-Frank. So we agreed.

Okay, Mr. Cordray said, I will not implement enforcement. I understand what you are saying. And Democrats agreed. We will set a grace period. It is okay.

You keep trying to debate this bill about the grace period. That is not an issue. That is not an issue at all. We agree to the grace period. Go, do your work; get your papers all worked out; get your staff all trained. But that is not what this issue is about.

This issue is about, where do you stand with consumers? Are you willing to say to consumers that if, in fact, you believe that you have been harmed in this closing, that all of a sudden the estimated costs are highly different, they are so different from what the final costs are--if you want to say to the consumer you don't have a right to go into court and raise that question, then you are against the consumers. The consumers should have a right to have their day in court despite the grace period.

The grace period should not be a period where you simply are getting your papers in order and you are training your staff. It should be a period where you still have a guarantee that you are not going to be tricked at closing time, that you are not going to be misled, that you are not going to be undermined in any way.

If you want this to be a grace period where folks can say, ``Ah, I have an opportunity now,'' the lender can say, ``I have an opportunity to get a little more money out of this deal,'' and then you would say if they misled the consumer that the consumer does not have a right at all to raise a question about it, I don't think so. So we on this side of the aisle, we stand with consumers.

When consumers decide to purchase a home, it is the biggest purchase of most people's lives, and they should be afforded the broadest recourse available under the law.

Many errors can occur in this complicated process, some made in good faith, some that are not. For example, a lender might fail to properly disclose key loan terms, such as annual interest rates, finance charges, and other critical information associated with purchasing a home. If a borrower feels that they have been harmed, they should have an opportunity to have their day in court without limitation.

I fully support the Consumer Financial Protection Bureau's announcement that it would engage in restrained enforcement actions against lenders under their new mortgage disclosure rules. The Bureau made similar assurances in response to the mortgage underwriting and servicing rules that went into effect last year. And I fully expect the Bureau to do the same with these new disclosure rules that they have always done, to be responsive to Congress, industry, and other relevant stakeholders, and to make thoughtful decisions on the best way to proceed in protecting consumers. I have no reason to believe that they will not be as thoughtful in their approach to the new mortgage disclosures as they were with the mortgage underwriting and servicing rules.

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Ms. MAXINE WATERS of California. While I also support the provisions of H.R. 3192 that are consistent with the CFPB's action to date, my support ends when the vital consumer protections, like the private right of action afforded to consumers under the Truth in Lending Act, are weakened or, worse, completely eliminated.

Under current law, consumers that feel that a lender provided an inaccurate or misleading mortgage disclosure can file suit under the Truth in Lending Act, and lenders are forced to prove that the disclosures they provided were consistent with the act. The burden of proof is properly placed with the lenders, as they have the resources to prove their good faith intent, and consumers often have limited information at the time they file suit. H.R. 3192, however, would shield the lenders from liability if an error was committed in good faith even if a consumer relied on this information to their detriment.

The act or the effect of the good faith provision is that it requires that consumers prove from the onset of an action filed against a lender that an error was not made in good faith, a burden of proof that a borrower simply lacks the means to make. As a result, the good faith requirement in H.R. 3192 operates as yet another hurdle for consumers and is a harmful departure from current law.

So I offered the amendment. And the gentleman from Massachusetts (Mr. McGovern) is correct. Why couldn't we have a debate on it? It is a very simple amendment.

This would help provide clarity to the marketplace while also protecting consumers. The amendment would simply restore a consumer's existing rights under TILA to bring an action during the temporary safe harbor period established by H.R. 3192 even if the action was filed in response to an error made by a lender in good faith.

Let me just say, whose side are you on? Are you on the side of consumers who expect you to protect them?

We have gone through a crisis in this country. We had a subprime meltdown. We discovered that consumers had been tricked. People buying homes had been misled. We discovered that they had loans that, well, they didn't even understand. We don't want to go back there. We want to protect consumers, and we have a right to do that. This amendment would have helped clarify that. You did not afford us that.

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Ms. MAXINE WATERS from California. Mr. Speaker and Members, we have to keep saying over and over again that this is not about the grace period. They keep arguing that somehow they favor a grace period, and we do not.

We have made it clear that is not what the debate is about. We support a grace period. Not only that, Mr. Cordray at the Consumer Financial Protection Bureau supports a grace period. That is not the argument here.

The argument is what you don't want to talk about, my amendment that I attempted. You came to this floor with a closed rule to keep us from talking about an amendment that would protect the consumers. My amendment would allow that consumers have a right to have their day in court.

When you talk about good faith and the way that this bill is written, of course. In my opinion, when a consumer in this grace period takes a look at the documents and if it is simply a comma, as one has indicated, well, that could be a mistake in good faith, and the lender will be okay.

But when the interest rates change, when there are more fees than were anticipated, when the cost of that mortgage goes up and the consumer says, ``Hey, this is not what I really intended. This is not what I agreed to,'' and the lender says, ``Sorry, that is it. That is what you signed up for,'' then the consumer has a right to go to court. And even though you would place the responsibility on the consumer to have to prove that the lender did not act in good faith, different from what the law is now, that consumer should have the right to go to court and make his or her case.

That is what this amendment is all about, and you know it. It is not about bringing your props in trying to say this is the bill. That is not the bill. You have all of the comments and everything else that is associated with the bill. So let's get some truth out here and have people understand what the amendment is and not just props showing that you have thousands of pages of a bill.

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