PROMOTING ACCESS TO MORTGAGE CREDIT

This Executive Order, signed by President Donald J. Trump on March 13, 2026, mandates a comprehensive reduction of regulatory burdens in the U.S. mortgage market. The order argues that two decades of "statutory and regulatory distortions"—specifically citing the Dodd-Frank Act—have driven community banks out of mortgage lending and reduced access to credit for rural and low-to-moderate-income households.The administration’s policy is to "tailor" rules for community banks (under $30B in assets) and smaller banks (under $100B in assets) to restore competition and lower rates.Key Mandates of the Executive Order:Mortgage Origination Reform: The CFPB is directed to tailor "Ability-to-Repay" (ATR) and "Qualified Mortgage" (QM) requirements for smaller banks. This includes broadening safe harbors for loans kept on a bank's books (portfolio loans), replacing rigid disclosure timing with "materiality-based" standards, and streamlining the refinancing process.Supervisory Shift: Federal regulators are instructed to evaluate lenders based on "prudent underwriting" and outcomes rather than technical process and "good-faith errors." Supervision will prioritize a "correction-first" approach, reserving enforcement for cases of actual borrower harm or reckless misconduct.Capital and Liquidity Changes: The order directs regulators to align capital requirements with actual credit risks for portfolio mortgages. It also expands the role of Federal Home Loan Banks (FHLBs), creating targeted liquidity programs for entry-level housing and small residential builders.Stimulating Construction: Regulators are urged to exclude 1-to-4 family residential development from "commercial real estate concentration" limits, making it easier for community banks to fund new home construction.Appraisal and Digital Modernization: The order promotes the use of Artificial Intelligence (AI) and alternative valuation models to speed up appraisals. It also mandates the elimination of "wet-signature" requirements, standardizing the use of e-signatures, e-notes, and remote online notarization to lower closing costs.Data and Privacy: The order seeks to raise the threshold for Home Mortgage Disclosure Act (HMDA) reporting, exempting more small banks from expensive data collection software and training requirements while protecting borrower privacy.Enforcement Restrictions: Regulators are discouraged from imposing civil monetary penalties unless violations are "willful, knowing, or reckless," rewarding banks that self-identify and remediate technical errors.The administration characterizes these actions as a "Digital Mortgage Modernization" effort intended to make the American Dream of homeownership accessible again by removing the "red tape" that has historically slowed lending and increased consumer costs.