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WASHINGTON, DC-The Mortgage Bankers Association is hoping to find legislative relief from the high costs of internal controls reporting as mandated by Section 404 of the Sarbanes-Oxley Act. Alison Utermohlen, a senior director, government affairs for MBA tells GlobeSt.com that the cost of compliance for mortgage companies is not declining as many had initially hoped. "In fact the costs in 2005 were largely the same as in 2004, and in one case one member company had found its audit costs had increased."

The organization is throwing its support behind the Compete Act introduced last week by Senator Jim DeMint (R-SC) and Congressman Tom Feeney (R-FL.) The Act, which stands for "Competitive and Open Markets that Protect and Enhance the Treatment of Entrepreneurs Act," was written to curtail SOX's regulatory reach on small public companies. It also embraces several suggestions that MBA has made in the past to streamline the regulatory process.

It would allow smaller companies to opt out of SOX Section 404, and mandate that SEC and the Public Company Accounting Oversight Board to change the standard of financial reporting. MBA as well as other industry associations has requested similar changes to be made at the regulatory level, with little success. For instance, it has asked the PCAOB to redirect testing from process-level controls to entity-level controls and to provide guidance on implementing Section 404. "For example, we have urged the regulators to provide some clarity regarding such uncertain terms as 'remote likelihood,'" Utermohlen says.