The Oklahoma Bankers Association has raised concerns about what new federal mortgage regulations proposed by the U.S. Consumer Financial Protection Bureau will mean for smaller community banks in the state.
In a letter to the bureau released Tuesday, the association said proposed rules that would exempt smaller banks from lending regulations surrounding loans with balloon payments would still be too stringent for many smaller institutions.
Under the proposed “ability to repay” rule, lenders would have to determine a borrower's ability to repay a loan using a detailed list of requirements for creditworthiness.
The new lending regulations are part of mortgage reforms in the Dodd-Frank Act that were enacted in the wake of the 2008 financial crisis and are meant to curb some predatory lending practices.
Community banks would be exempt from some restrictions on making loans with balloon payments under the proposed Consumer Financial Protection Bureau rules, but the regulations don't go far enough to ensure that smaller lending institutions in Oklahoma would be able to continue to make such loans, the association said in its letter.
Community banks in Oklahoma simply do not have the staffing available to monitor and comply with all of the new lending requirements, the bankers association said.