ICBA Survey: 73 Percent of Community Banks Say Regulations Inhibit Mortgage LendingICBA Survey: 73 Percent of Community Banks Say Regulations Inhibit Mortgage Lendinghttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=103902015-01-27T11:20:00Z2015-01-27T00:00:00Z

WASHINGTON, D.C. (Independent Community Bankers of America) – New mortgage restrictions have caused many community banks to scale back on the number of residential mortgage loans they make, according to a new survey by the Independent Community Bankers of America (ICBA).

Seventy-three percent of survey respondents said regulatory burdens are preventing them from making more residential mortgage loans.

"ICBA’s survey validates what community banks have long predicted: that new restrictions on mortgage lending are reducing much-needed access to mortgage credit for many Americans," said ICBA President and CEO Camden R. Fine.

Other survey findings include:

  • Significant percentages of community banks are no longer active in the residential mortgage market, are considering an exit from this line of lending or are exiting the market.
  • 78 percent of respondents reported increasing the number of staff members dedicated to lending compliance over the past five years.
  • 44 percent said they originated fewer first-lien residential mortgage loans in 2014 compared with the year before.
  • 66 percent said they do not provide loans that are outside the Consumer Financial Protection Bureau’s (CFPB) Qualified Mortgage (QM) definition or would only do so in special cases.
  • 25 percent said they are providing loans that do not fit the CFPB’s QM definition, showing that the new restrictions have shrunk the credit box and taken away lender discretion in granting credit.
  • Half of all rural banks said they do not qualify for the QM rule’s "rural" exception, which demonstrates that exemptions from the standard are too narrow, limiting access to credit for consumers who need it.
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