Will the Dodd-Frank changes affect Lending and Mortgage?

In a historic measure, the House approves Dodd-Frank changes in a vote of 258-159.  This is the most significant bipartisan revamp of financial rules since the 2008 FInancial crisis.  The new law is now ready for signing by President Donald Trump.  Upon signing the law sets a wave of deregulatory actions by federal agencies that will ease—but not dismantle—the 2010 Dodd-Frank financial law.

Dodd-Frank Changes – Key Points

Dodd-Frank Act was a major move in 2010 which aims to prevent the repeat of a financial crisis during that decade.  Although many hope for the repeal of this law considering current economic situations it maintains key provisions of the act.  The legislation leaves untouched most of Dodd-Frank’s major planks, such as emergency government powers to take over failing financial firms and curbs on derivatives. These provisions are expected to remain in place for years to come.

Here are some of the Dodd-Frank changes:

  • Increasing the threshold at which banks are considered big enough to be a potential threat to the economy in case of failure, and subjected to greater scrutiny.  The new bill rises the threshold from $50 billion in assets to $250 billion.
  • Regulatory relief for manufacturing home sellers.
  • Freeing some smaller institutions from some reporting requirements tied to home lending.
  • Excludes banks that originate fewer than 500 mortgages annually from having to report certain racial and income date on the loans, unless they perform poorly on tests of lending discrimination.

Would Dodd-Frank Changes Affect Mortgage and Lending?

Do you think this new bill once signed into law by President Trump would affect mortgage and lending?  Proponents of the bill say that it will spur more lending and help boost the US economy.  Others, however, say that some of the provision will make it hard to determine discrimination and even encourage them.

We can say that at some point it will have some effect on the mortgage and lending industry particularly in making it easy for smaller players to engage.  Relieving them of some requirements makes it easier in some way to get a loan and increase lending portfolio.

What do you think?  Is this new law something to celebrate about?  Share your comment and view in the comment section below.

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