Chase CEO urges mortgage reform
In his most recent annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon expressed concerns about the current state of mortgage industry regulation in the U.S.
“The country desperately needs mortgage reform,” Dimon wrote in the letter when discussing his company’s views on financial regulation. “It would add to America’s economic growth.”
Dimon’s chief grievance is with the “onerous and unnecessary origination and servicing requirements” that currently make up the dense patchwork of home lending rules in the U.S. While he concedes that stronger regulation of the industry following the Great Recession was the right move, Dimon says political leaders haven’t done enough to enact those reforms cohesively, nor relax them as confidence in the financial system has returned. For example, new capital reserve rules don’t take into account low-risk assets like prime mortgages, reducing incentives for banks to originate and service their own loans.
As a result, he says, banks have moved away from the home lending market, restricting credit access to young and lower-income Americans especially. He further insinuates that Chase plans to continue to pull back its mortgage lending activity, saying it has become “hugely unprofitable” for banks to originate mortgages and then retain them as …