Lubbock, TX Businesses Want Common Sense Reforms

By Rhett Davis, Region 6 Advocate

I previously wrote about comments we received from Lubbock regarding agriculture, livestock, pesticides, ranching, trucking and trade. Let’s examine additional comments that we received from other companies in attendance regarding real estate and financial services.

“Cut back on regulations,” said a compliance officer for a firm that operates 15 rural banks in the region. He added that the Community Reinvestment Act (CRA) exams need clearer and more uniform interpretation, explaining that his company argues regularly with federal examiners even though they have a great record. He also raised concerns over “predatory lenders,” who are becoming more attractive to many consumers in the current regulatory environment.

A bank president suggested that the Federal Emergency Management Agency (FEMA) revise flood maps and add exceptions for high elevation, non-flood cities and regions. He and others in the room complained that taxpayers in the high elevation Lubbock area are forced to purchase flood insurance to supplement those in low-lying areas of the East Coast.

He also suggested clarifying and making uniform CRA requirements and examinations. Many community-based activities that banks are performing are not being counted or credited by the examiners, he said. It seems to be vague and left up to the whim of each examiner.

He, too, voiced concerns about “predatory lenders,” who are hurting banks and most consumers who use them. Reverse mortgage lenders are causing seniors to lose their homes daily due to a lack of proper disclosure and an absence of oversight, he added. Finally, he contends that Freddie Mac and Ginnie Mae receive an unfair advantage over private sector lenders who are heavily regulated.

The head of a real estate agents association said the new $10,000 cap on mortgage interest deduction is negatively affecting prospective customers and existing home owners already. She suggested a repeal of the ceiling. She also was critical of the amount of paperwork needed to close a loan.

“There are too many regulations and too much paperwork in lending and home and purchase transactions,” she said. The new rule that provides a 72 hour “back out” provision for home buyers is not a bad idea, but the rules are very confusing to the consumer, hence, the paperwork must be revised, she added. The disclosure forms must be re-drafted to be made clearer because the consumers are very confused. The amount of paperwork has dramatically increased, and the lender, rather than the title company, must enforce the paperwork. Her recommendation was to shift the burden back to the experts, the title company.

Small business leaders attending the Office of Advocacy’s August 29 regulatory forum in Lubbock, Texas came from many backgrounds and different industries, but their message was consistent: the federal government should use common sense when imposing regulations on the business community.

Rhett Davis serves as the Region 6 Advocate for the SBA Office of Advocacy, representing small businesses in Arkansas, Louisiana, New Mexico, Oklahoma and Texas. Davis works with small business owners, state and local governments, and small business associations to bring the voice of Region 6 to Washington DC. He can be reached at


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