Who Said Bipartisanship is Dead? A Quarter of House Democrats Join Republicans in Voting to Roll Back Financial Regulations. Jonathan Cohn Follow Feb 9, 2018 · 3 min read

Bipartisanship, when it exists in DC, tends to either manifest itself in things that are so anodyne to be barely worth talking about (naming post offices, small land conveyances, etc.) or things that are terrible.

The House of Representatives displayed the latter yesterday when, in the midst of final whipping and debating about the two-year budget deal (that blows past military spending caps and does nothing for Dreamers), they voted to pass two bills to roll back regulations on mortgage lenders and banks. In each case, about 26% of the Democratic Caucus joined their Republican colleagues.

The first of the two bills was the Mortgage Choice Act of 2017, a bill less about offering greater choices than about allowing mortgage companies to prey on subprime borrowers.

As a measure to address the problems with subprime lending that fueled the mortgage crises, the Dodd-Frank Act established criteria for an “ability to repay rule,” requiring mortgage lenders to make a good faith, well-documented determination that borrowers are able to pay back their loans. Mortgage lenders who followed such “qualified mortgage” criteria would be given certain legal protections.

When the Consumer Financial Protection Bureau adopted a rule on qualified mortgages in 2014, it gave definition to these criteria and set a limit on the “points and fees” associated with a mortgage, requiring them to be no more than 3% of the total amount borrowed.

The Mortgage Choice Act is an attempt to exclude various fees from this cap, making it easier for subprime lenders to engage in exploitative practices.

It passed 280 to 131. 228 Republicans and 52 Democrats voted for it, and 131 Democrats voted against it.

Here are the 52 Democrats:

The second bill was the Small Bank Holding Company Relief Act.

The Federal Reserve Board currently defines a small bank as one holding debt no greater than $1 billion. This bill would raise that level to $3 billion.

This bill would require the Federal Reserve Board to change its Small Bank Holding Company Policy Statement (SBHCPS) to allow banks to hold a debt level of $3 billion instead of $1 billion currently allowed.

Four years ago, Congress passed bipartisan legislation to raise the threshold from $500 million to $1 billion. The intent was to allow small community banks and savings associations to operate with higher levels of debt when they merge with other community banks, so that when small/community banks are purchased, they are more likely to be purchased by other small/community banks. Tripling this debt level will encourage large banks to purchase such small and community banks, increasing financial consolidation and the risks associated with.

It passed 280 to 139. 230 Republicans and 50 Democrats voted for it, and 139 Democrats voted against it.

Here are the 50: