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33 » VISIT US ONLINE @ DSNEWS.COM BANKING LOBBY PUSHES TO RESTRUCTURE CFPB Members of the banking and housing lobby recently sent a letter to the leaders of the Senate and House appropriations committees requesting the Consumer Financial Protection Bureau (CFPB) be restructured, changing its leadership from a single director to a bipartisan panel of five people. A total of 22 organizations signed the letter, including the American Bankers Association, the National Association of Federally-Insured Credit Unions, and the National Association of Realtors, amongst others. In the collective letter, the authors make their case: "A Senate confirmed, bipartisan commission will provide a balanced and deliberative approach to supervision, regulation, and enforcement for consumers and the financial institutions the CFPB oversees by encouraging input from all stakeholders. e current single-director structure leads to regulatory uncertainty and instability for consumers, industry, and the economy, leaving vital consumer financial protection subject to dramatic political shifts with each changing presidential administration. Moreover, a commission is the traditional and customary structure for the regulators of our nation's depository institutions." It is not immediately clear why the letter was sent to the appropriations committee. However, Victor Whitman at Scotsman Guide News said it's likely because the two committees control the budget process. "Certain bills can be fast-tracked through budget resolutions employing special rules in what is known as reconciliation and would not require 60 votes in the U.S. Senate to pass," he wrote. "is is how the Senate Republican leadership plans to pass its version of the Obamacare repeal bill and replacement, but legal experts have told Scotsman Guide News that changes to the CFPB couldn't be done this way." Currently, the director can only be removed by the president, "for cause," however, many analysts don't believe that Congress will be able to pass legislation before Richard Cordray's appointment is up in 2018. UP, UP, AND AWAY— HOME PRICES ON THE RISE For the fifth month in a row, home prices have set a national record, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index released in June. Across all nine census divisions, U.S. home prices rose 5.5 percent over the year. e index's 10-city composite rose 4.9 percent for the year, while the 20-city composite increased 5.7 percent. Both numbers were down slightly from March's numbers, which came in at annualized growth rates of 5.6 percent and 5.9 percent, respectively. Still, despite the slight slowing of growth, home prices are steadily climbing—and have been for some time. And according to David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, the continuing rise in prices raises concerns of another housing crisis. "As home prices continue rising faster than inflation, two questions are being asked: Why? and, Could this be a bubble?" Blitzer said. "Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up." Increasing demand—and inventories that just can't keep up—are also of concern, Blitzer said. "e increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising," he said. "At the same time, the supply of homes for sale has barely kept pace with demand and the inventory of new or existing homes for sale shrunk down to only a four-month supply. Adding to price pressures, mortgage rates remain close to 4 percent and affordability is not a significant issue." Ultimately though, Blitzer thinks we don't need to worry about another crash—at least not yet. "e question is not if home prices can climb without any limit; they can't. Rather, will home price gains gently slow or will they crash and take the economy down with them?" Blitzer said. "For the moment, conditions appear favorable for avoiding a crash. Housing starts are trending higher, and rising prices may encourage some homeowners to sell. Moreover, mortgage default rates are low and household debt levels are manageable." Broken down by city, Seattle, Portland, and Dallas experienced the biggest jumps in home prices over the year, with 12.9 percent, 9.3 percent, and 8.4 percent increases, respectively.

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