Clifford Chance

Treasury Issues Report Regarding Nonbank Financials, Fintech, and Innovation – Residential Mortgage Lending

11 August 2018

The U.S. Department of the Treasury (the "Treasury") has released a fourth report in a series of reports produced in response to Executive Order 13772, which sets out the Administration's seven core principles for regulating the U.S. financial system (the "Core Principles"). This report, entitled "A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation" (the "Fourth Report") analyzes and provides recommendations for the regulation of nonbank financial companies, the fintech sector and other forms of financial market innovation through the lens of the Core Principles. Thematically, the Fourth Report primarily addresses the following two Core Principles: (1) making regulation efficient, effective, and appropriately tailored and (2) enabling American companies to be competitive with foreign firms in domestic and foreign markets.

This briefing discusses the Treasury's recommendations regarding residential mortgage lending. Specifically, the Fourth Report highlighted several areas of potential improvement for the residential mortgage industry, including adapting to the increase in non-bank participation, addressing regulatory challenges which discourage market participation or otherwise hinder the industry, and encouraging the adoption of available technological improvements.

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