House Republicans and the nation's head consumer watchdog sparred Tuesday over an agency proposal to simplify mortgage documents that runs more than 1,000 pages.
Republicans expressed astonishment at the length of the proposed rule and argued the page count is evidence that the Consumer Financial Protection Bureau (CFPB) is taking the heavy-handed approach to regulation that it has long feared.
"Only inside this Beltway that we come up with solutions that are so difficult," Rep. Mike Kelly (R-Pa.) said at the hearing of a House Oversight subcommittee. "It's government red tape that's keeping this economy from recovering."
The bureau’s director, Richard Cordray, defended the rule and said it grew in length after the bureau tried to accommodate concerns of the GOP and industry groups.
The CFPB rule, unveiled earlier this month, would combine two forms that most borrowers fill out to apply for a mortgage. The bureau wants to replace those applications with a single, easy-to-understand document that lays out important loan information.
But while the end result would be a simplified form, Republicans said the more than 1,000 pages of regulations required to implement it would burden banks and stifle lending.
"One single compliance officer is going to have to go through to understand what it means," said Rep. Patrick Meehan (R-Pa.).
Cordray maintained that the actual rules outlining the use of the new documents constitute "only a small portion" of the hefty document, with the rest of it consisting of a detailed analysis of the rule, including a cost-benefit analysis.
As regulators have worked to implement the Dodd-Frank reform law, which created the CFPB, Republicans have stressed the need for new rules to go through a rigorous cost-benefit analysis. The House will vote this week on GOP-sponsored legislation that would direct two financial regulators to do just that.