The Dodd-Frank Wall Street Reformand Consumer Protection Act of 2010 was designed to protect consumers andthe banking system, regulating restricted lending institutions’ ability to provideconsumer mortgages and construction loans, implementing burdensome and costly provisions. Dodd-Frank could potentially impact housing production,home sales, and the overall economy.
President Trump came into office promising to scale back the excessive federal regulation, and the reform of Dodd-Frank comes on the heels of House Financial Services Committee Chaim Jeb Hensarling’s (R-Texas) introducing of the Financial CHOICE act of 2016, which proposes to roll back or reform significantcomponents of Dodd-Frank and would loosen overly tight credit conditions.
Supported by the NAHB, the Financial CHOICE Act would prevent new financial rules from weighing too heavily on small business and any new rules and regulations would be subject to reviewunder the REINS Act (Regulation from the Executive in Need of Scrutiny) and wouldhave to be passed by congress before they would be implemented.
Additionally, the CHOICE act would offer regulatory relief to community financial institutions, the most common sourceof lending for home construction. With regulatory relief for these institutions, we should see enhanced credit availability for home buyers and increased supportfor the long-term viability of community banks.
Ultimately, the NAHB’s message is simple: Careful and well-considered loosening of certain financial regulationswill help builders to get loans, homebuyers to access mortgage credit,community banks to prosper, and the overall economy to return to full strength.
Paraphrased from the NAHB NOTES CHAIRMAN’s LETTER in the March 2017 Issue ofBuilider Magazine.