Republican senators advanced a plan Wednesday to roll back financial industry regulations, including consumer safeguards for costly mobile-home loans.
Before the vote, Democrats on the Senate Banking Committee pushed to scale back the overall bill, offering an amendment that would have left mobile-home safeguards untouched. But Republicans squashed that proposal and approved the overall plan along partisan lines.
The U.S. House previously approved the manufactured-housing provisions of the bill.
The Seattle Times recently reported that the plan to deregulate mobile-home loans would overwhelmingly benefit Clayton Homes, a company under Warren Buffett’s Berkshire Hathaway that was the subject of a recent investigation by the Times and the Center for Public Integrity. Lawmakers only made offhand mentions to the manufactured-housing changes in Thursday’s discussion of the bill.
Mobile-home buyers who are offered high-cost loans are supposed to receive a variety of consumer protections under rules implemented last year. Among them, lenders are required to give those borrowers an accounting of all costs and interest rates three days before signing. Lenders are also prohibited from charging prepayment penalties and are required to refer borrowers to pre-loan counseling.
Under the rules, high-cost loans are defined as having annual interest rates more than 6.5 percentage points above the average prime rate. For smaller loans under $50,000 the protections typically apply to those more than 8.5 percentage points above that benchmark.
The deregulations plan in Congress would raise the 8.5 rate rule to 10 percentage points and the small-loan threshold from $50,000 to $75,000. In 2013, Clayton controlled 91 percent of the market segment set to be deregulated.