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By Richard J. Andreano, Jr. & John L. Culhane, Jr. on March 17, 2026

Posted in CFPB, Community Banks, Mortgages, Regulatory and Enforcement, Trump Administration

President Trump recently issued an Executive Order entitled “Promoting Access to Mortgage Credit” seeking to promote mortgage lending by community banks and smaller banks. The Executive Order refers to community banks and smaller banks as banks with assets of less than $30 billion and $100 billion, respectively.

The premise of the Executive Order is that “[o]ver the past two decades . . . statutory and regulatory changes — including rules adopted under the Dodd Frank Act . . . and subsequent rulemakings — have increased the compliance costs of mortgage origination and servicing and distorted the structure of the mortgage market. These burdens have contributed to a significant decline in bank participation in mortgage lending.” The Executive Order seeks to reduce the burdens through a combination of easing various regulatory requirements and supervisory and enforcement policies and addressing the capital and liquidity frameworks applicable to community banks and smaller banks.

Regarding the easing of regulatory requirements, the Executive Order provides that the CFPB “shall consider, as appropriate and consistent with applicable law:”

• Proposing amendments to the regulations under the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA), including the ability to repay (ATR)/qualified mortgage (QM) rule under TILA and the TILA/RESPA Integrated Disclosure (TRID) rule.
  • The ATR/QM rule sets forth requirements for QMs which, if satisfied, create either a safe harbor of compliance or a rebuttable presumption of compliance with the rule. The Executive Order provides that the amendments to the rule potentially may include a broader QM safe harbor for loans that banks retain in their portfolio.
• “[E]xempting small-mortgage loans from caps on QM points and fees or, as appropriate, modifying such caps to support affordability.”
  • The ATR/QM rule limits the total dollar amount of points and fees that may be charged by a creditor for a loan to be a QM loan, with the amounts varying based on the principal balance of the loan. For example, during 2026 if the loan amount is greater than or equal to $137,958, the points and fees may not exceed 3% of the total loan amount, and if the loan amount is less than $17,245, the points and fees may not exceed 8% of the total loan amount. There are three additional tiers of points and fees limits for loan amounts between those two amounts.
• “[U]pdating regulations regarding banks’ reasonable compliance with ATR and QM underwriting requirements by removing unnecessarily burdensome elements.”
• Replacing TRID timing rules with a “materiality-based standard that preserves consumer clarity and reduces closing delays.”
  • The TRID rule imposes a seven-business day waiting period between when a creditor delivers or mails a Loan Estimate to the consumer and consummation of the loan, and a three-business day waiting period between when a consumer receives a Closing Disclosure and consummation of the loan.
• “[M]odernizing the right to rescission for mortgage lending, for example, by enabling increased secure electronic and digital forms and processes.”
• “[S]treamlining the requirements applicable to rate-and-term refinancing under Regulation X mortgage servicing rules.”
  • It is not clear what the Executive Order contemplates regarding this provision, as a rate-and-term refinance would appear to be governed more by Regulation Z under TILA than the mortgage servicing provisions of Regulation X under RESPA.
• “[E]xempting rate-and-term refinancing (including cash-out refinancing) from rescission rights.”
  • Under TILA/Regulation Z, for refinance loans secured by a consumer’s principal dwelling the consumer has three business days after consummation to rescind the loan.
• “[P]roposing amendments to Regulation C to raise the asset threshold for exemption from HMDA data collection and reporting requirements for smaller banks, to exclude inquiries from the scope of HMDA, and to ensure that disclosures protect privacy and reduce burdens, including insufficiently tailored, expensive, and complex software and training needed for reporting financial institutions.”
  • The HMDA asset-based exemption threshold is statutory. An attempt by the CFPB to modify the threshold by regulation may face challenges as to whether the CFPB’s exception authority under HMDA is broad enough to modify the threshold. Inquiries currently are not reportable under HMDA, although pre-approvals under certain types of formal pre-approval programs are reportable. It’s unclear whether the Executive Order intends to target reportable pre-approvals. As previously reported, there is a concern that the publicly available HMDA data can be combined with other publicly available data to determine the identity of consumers in HMDA Loan Application Registers.
  • The HMDA data collection and reporting requirements impose significant operational and cost burdens on mortgage lenders.

The Executive Order directs the CFPB, federal financial institution regulators and Federal Housing Finance Agency (FHFA) to “consider, as appropriate and consistent with applicable law and their statutory authorities:”

• “[M]odernizing appraisal regulations and guidance to expand the use of alternative valuation models, desktop and hybrid appraisals, and artificial intelligence valuation tools.”
• “[S]implifying appraiser qualification requirements.”
  • There is a concern in the mortgage industry that existing appraiser qualification requirements pose a high barrier to entry into the field, leading to a shortage of appraisers.
• “[R]educing appraisal requirements for low-risk transactions, including low loan-to-value refinancing and small balance loans; and setting clear appraisal timelines.”

The Executive Order also directs the U.S. Department and Housing and Urban Development and the U.S. Department of Veterans Affairs (VA) to “consider, as appropriate and consistent with applicable law:”

• Aligning appraisal standards between the Federal Housing Administration insured home loan program and VA guaranteed home loan program, where risk is comparable.
• “[C]larifying the distinction in an appraisal inspection between safety and habitability concerns that necessitate pre-closing repairs versus cosmetic concerns.”
• “[E]xpanding post-closing repair flexibility.”

The Executive Order directs the federal financial institution regulators to “consider, as appropriate and consistent with applicable law, revising supervisory guidance to ensure that:”

• “[E]xaminers evaluate mortgage lending based on the effectiveness of the lender’s policies regarding a consumer’s ability to repay and prudent underwriting, rather than the existing focus on process and technical compliance.”
• “[G]ood faith, technical compliance errors are subject to correction-first supervisory treatment, with enforcement reserved for borrower harm or repeated misconduct.”

The Executive Order directs the federal financial institution regulators and the FHFA to consider various measures, including the revision of capital requirements. It also directs the federal financial institution regulators to “consider, as appropriate and consistent with applicable law, promulgating a policy against enforcement actions for violations of consumer financial laws that:”

• “[D]iscourages imposing civil monetary penalties, except where the underlying violations are willful, knowing, or reckless.”
• “[C]onsiders good corporate conduct, including a bank’s correction of good-faith, technical compliance errors.”
• “[A]llows institutions a reasonable opportunity for self-identification and remediation of appropriate compliance matters.”