CFPA proposal launches congressional tug-of-war

In the midst of the healthcare reform battle, another war is raging between President Barack Obama and Congressional Democrats. Consumer finance took center stage in early July with the Consumer Financial Protection Agency Act of 2009, a scaled-back version of Obama’s previous proposal.

The House Financial Services Committee proposal is structured very similarly, with a few key differences. Like Obama’s proposal, it will grant the new CFPA power to create and monitor regulations for products offered by the financial industry. Unlike Obama’s proposal, congress proposes to leave enforcement of the Community Reinvestment Act in the hands of offices like the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS), as opposed to the newly formed CFPA. Furthermore, congress does not propose a merger of OTS and OCC into a new regulatory agency called the National Bank Supervisory, as Obama proposed.

The congressional CFPA proposal is not without some internal squabbling among Democrats. Those serving on the House Energy and Commerce Committee protest that the Federal Trade Commission, which falls under that committee’s oversight, should retain regulatory power over non-bank financial products. Losing control over mortgage brokers and finance companies will significantly restrict the role of the FTC and thus the Energy and Commerce Committee, argued former committee Chairman Frank Dingell (D-MI).

Supporters of CFPA counter-argued that one agency with one mission to oversee the financial industry will repair some of the past damage done by the FTC’s historic lack of oversight. The bill, HR 3126, is currently under review by the committees of finance and energy and commerce.

I Believe (reprinted from Mike Pryor at ALTA)

(Reprinted with permission from Mike Pryor at ALTA - http://www.mikepryor.net/)

I was recently asked why I am so adamant about the need for a good title search.

Because…..

• I believe the cornerstone of property rights in the United States is based on a transparent and reliable method of providing constructive notice regarding those precious rights.
• I believe a good title search brings attention to areas of the public record that need correction, satisfaction or curative action.
• I believe that without the scrutiny and curative action resulting from a good title search, critical public real estate records in our country will fall into disarray.
• I believe that failure of confidence in the public records will inevitably lead to increased fraud and false claims against legitimate property rights.
• I believe corrupted public records will result in a reluctance or refusal of credit.
• I believe once the public records are damaged beyond any ability to prove unimpaired ownership, title insurance will become unaffordable for most consumers.
• I believe when a loan is conditioned on an unaffordable title insurance product or an unattainable proof of lien priority, economic prosperity is threatened.

Do you still wonder why I am so adamant about the need for a good title search?

Because….

• I believe the quality of a title search should be more than an “occasional” requirement for issuing title insurance.
• I believe consumers are entitled to disclosure of all title impairments of record, regardless of the insuring decisions.
• I believe a title policy issued on a poor (or non-existent) title search provides an illusory near term savings at a catastrophic long term price…both for consumers and title insurers.
• I believe our individual and corporate responsibility to the economic future of our children and grandchildren is violated every time we forego a good search in favor of a quick profit.
• I believe, as an industry, we should be protectors of good standards, not just servants to the avarice of mortgage markets that require “quick” at the expense of “good”.
• I believe those in the title business should learn from current business examples that the consequences of short cuts, regulatory failure and improper attention to risk are devastating.

Finally, I believe a good title search of good public records unleashes the power of asset leveraging and securitization in a way that, with restored diligence, can keep the American dream of home ownership alive for future generations.

That’s why I am so adamant about the need for a good title search.

Thanks for asking!

Mike Pryor
www.mikepryor.net