In a move to protect middle-class borrowers from President Joe Biden and his higher interest rates for people with good credit, the House of Representatives passed the Middle-Class Borrower Protection Act.
Alaska Rep. Mary Peltola voted against the passage of the Middle-Class Borrower Protection Act, a bill that garnered bipartisan support of 14 Democrats and that aims to create safeguards against fee changes based on borrowers’ debt-to-income (DTI) ratios. It institutes a one-year freeze on the Biden Federal Housing Finance Agency’s increase of mortgage rates for good-credit borrowers, so that poor-credit borrowers can get better mortgage rates. The punishing rule went into effect in June.
“Why would you punish people by making it more expensive for people that have been most responsible? On the credit score piece, it’s not even clear that it only helps people who are poor. I mean, there are wealthy people who don’t manage their credit well,” Rep. Warren Davidson told reporters. Davidson, who is a Republican from Ohio, is a co-sponsor of the legislation.
The bill’s other co-sponsor, Rep. Tom Emmer of Minnesota, expressed concerns about the Biden Administration’s socialist agenda, stating, “Homeownership already feels out of reach, and now this administration wants to subsidize individuals with a history of financial irresponsibility and penalize Americans who have worked hard to build strong credit.”
Emmer’s office conducted a survey among constituents that revealed that 93% of the 6,000 respondents believed that prospective homebuyers with good credit should not be required to subsidize high-risk borrowers.
Peltola did not survey her constituents before voting against overturning the rule. The measure passed the House with a vote of 230 to 189 and proceeded to the Senate for further deliberation.