CFPB Issues Two Proposed Rulemakings Relating to HMDA
This week, the Bureau of Consumer Financial Protection (CFPB) issued a Notice of Proposed Rulemaking (NPRM) and an Advance Notice of Proposed Rulemaking(ANPR) related to the Home Mortgage Disclosure Act (HMDA). The NPRM proposes two alternatives that would permanently increase the coverage threshold from 25 to either 50 or 100 for closed-end mortgage loans, and also extend for two years the 500 loan threshold for open-ended lines of credit with a permanent threshold of 200 loans. The ANPR seeks information on the costs and benefits of collecting and reporting the data points in the 2015 HMDA Rule added to Regulation C, and certain pre-existing data points that the 2015 HMDA Rule revised. It is important to note that ANPRs are often a prelude to a notice of proposed rulemaking, so any changes in these areas would be made well into the future. The Bureau has posted a summary of the proposed rulemaking and an unofficial, informal redline of the proposed amendments to Regulation C to assist industry and other stakeholders in reviewing the proposed changes. The summary is available here and the redline is available here. Comments on the NPRM are due 30 days after publication in the Federal Register, and comments on the ANPR are due 60 days after publication in the Federal Register.
For more information, please contact Justin Wiseman at (202) 557-2854 or Blake Chavis at (202) 557-2930.
House Subcommittee Focuses on Diversity & Inclusion in Financial Services
This past Wednesday, the Subcommittee on Diversity and Inclusion of the House Financial Services Committee held a hearing entitled, “Good for the Bottom Line: A Review of the Business Case for Diversity and Inclusion,” to examine data and discuss research that details the benefits that can be achieved when financial services organizations implement robust diversity and inclusion practices in hiring and advancement practices.
During the “Q&A” portion of the hearing, Subcommittee Chairwoman Joyce Beatty (D-OH) focused her questions to the expert panel on paths to success for both the hiring and retention of diverse employees in both the private and public sector. Ranking Subcommittee Member Ann Wagner (R-MO) noted that diversity and inclusion are essential for future growth and innovation in the financial services industry and asked panelists for specific strategies to implement to ensure diverse work forces in the industry.
For more information, please contact Ernie Jolly at (202) 557-2741 or Dan Grattan at (202) 557-2712.
House Financial Services Committee Discusses Affordable Housing in Context of Infrastructure Spending
This past Tuesday, the full House Financial Services Committee held a hearing examining a proposal to significantly increase federal spending on affordable housing as an infrastructure modernization imperative. The hearing focused on Chairwoman Maxine Waters’ (D-CA) legislative draft entitled, “The Housing is Infrastructure Act of 2019.” This legislation would authorize $92 billion in funding for several housing infrastructure projects, including a huge reinvestment in public housing. Specifically, it calls for $70 billion for the Public Housing Capital Fund (PHCF) to pay for public housing backlogs; $5 billion for disaster mitigation efforts; and $5 billion for the Housing Trust Fund (HTF) to provide housing for the lowest-income households. Witnesses included low-income housing advocates, professionals serving public housing authorities, and industry representatives (NAHB and NMHC).
During the hearing, Chairwoman Waters discussed the affordable rental housing shortage throughout the United States, citing the National Low Income Housing Coalition’s (NLIHC) estimates of a shortfall of approximately 7.2 million affordable rental housing units. Republicans recognized the significance of the affordable housing issue, though they cited significant costs and issues with local regulations in affordable housing development as a hurdle. Ranking Member Patrick McHenry (R-NC) and Andy Barr (R-KY) also expressed support for HUD’s Rental Assistance Demonstration (RAD) program.
During the “Q&A” portion of the hearing, Rep. Rashida Tlaib (D-MI) expressed concerns that banks are discriminating against low-income and minority Americans seeking mortgages. Diane Yentel of NLIHC responded that ensuring underserved communities have access to credit is paramount, and spoke in support of Fannie Mae and Freddie Mac’s Duty to Serve plans.
For more information please contact Ernie Jolly at (202) 557-2741 or Dan Grattan at (202) 557-2712.
Senate Banking Committee Holds Hearing Regarding Regulatory Guidance
This past Tuesday, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing entitled, “Guidance, Supervisory Expectations, and the Rule of Law: How do the Banking Agencies Regulate and Supervise Institutions?” The witnesses included: Greg Baer, President and Chief Executive Officer, Bank Policy Institute; Margaret Tahyar, Partner, Davis Polk & Wardwell LLP; and Patricia McCoy, Professor of Law, Boston College Law School. During the hearing, Chairman Mike Crapo (R-ID) urged regulators to provide clear guidance and uniform instructions to examiners. Ranking Member Sherrod Brown (D-OH) and Senator Catherine Cortez Masto (D-NV) both raised concerns about the April 11, 2019, Office of Management and Budget (OMB) memo, “Guidance on Compliance with the Congressional Review Act," which applies an Office of Information and Regulatory Affairs (OIRA) oversight process to independent banking regulators. In response to a question from Senator Cortez Masto, McCoy stated, “OMB and OIRA have no statutory authority to tell the federal bank regulators how to conduct their cost benefit analysis. In fact, they are barred from doing so.”
For more information, please contact Erin Barry at (202) 557-2913 or Tallman Johnsonat (202) 557-2866.
Ginnie Mae Solicits Feedback on Potential Changes to MBS Pool Eligibility Parameters
Today, Ginnie Mae published a Request for Input (RFI) as it considers making changes to the parameters governing loan eligibility for pooling of mortgages into its security. This RFI is a part of the agency’s continuing effort to monitor and support the market performance of the Ginnie Mae mortgage-backed securities (MBS). The publication of the RFI follows policy changes already implemented by Ginnie Mae and the Department of Veterans Affairs (VA) to address abnormal prepayment patterns in some mortgages pooled in Ginnie Mae MBS that negatively affect MBS pricing, to the detriment of home mortgage loan affordability.
The RFI provides background information and analysis for consideration and specifically requests input concerning the potential removal from, or the restriction of, certain cash-out refinance mortgages within the Ginnie Mae II MBS. An item for consideration is the potential for VA cash-out refinances in excess of 90% loan-to-value to be excluded, or restricted, from the multi-issuer pools, given their performance history in the securities and the program requirement differences relative to FHA and the GSEs. All responses to the RFI are to be submitted to Ginnie Mae by May 22, 2019.
In February, MBA submitted comments to VA detailing a series of recommendations to deter VA loan churning. MBA is also in regular communication with VA and Ginnie Mae regarding these issues, and we remain committed to ending the practice of loan churning targeted at service members, veterans, and surviving spouses, while preserving their legitimate refinancing opportunities.
For more information, please contact Dan Fichtler at (202) 557-2780.
MBA CEO Bob Broeksmit Discusses Housing at Milken Global Conference 2019
This week, the Milken Institute held its Global Conference 2019 in Beverly Hills, CA. MBA President and CEO Bob Broeksmit took part in a panel discussion entitled, “Housing Finance Reform: Will We Finally Get the Stone Up the Hill?” The panel was moderated by Eric Kaplan, Director at the Milken Institute Center for Financial Markets. Other panelists included Jeb Mason, Partner at The Cypress Group; and Lisa Rice, President and CEO of the National Fair Housing Alliance. Among the topics discussed were the various reforms needed to address the future of the secondary mortgage market.
For more information, please contact Rob Van Raaphorst at (202) 557-2799.
New York DFS Announces Merger of Enforcement and Consumer Protection Divisions; Appoints Katherine Lemire to Lead the New Group
On Monday, the New York Department of Financial Services (DFS) issued a press release announcing Katherine Lemire’s appointment as Executive Deputy Superintendent of the Department’s newly created Consumer Protection and Financial Enforcement Division. Since the departure of Richard Cordray from the CFPB, several states have announced, or are considering, the establishment of CFPB-like bodies. This week’s news follows the general contours of previous announcements in other states – these “mini-CFPBs” are being created through executive branch reorganizations that combine existing agencies with responsibility for industry oversight and consumer protection into a single entity. This approach bypasses the state legislatures, and limits industry/stakeholder opportunities to weigh in. In this case, the new DFS unit will be formed through the merger of two existing DFS units: the Enforcement and Financial Frauds division and the Consumer Protection division. According to the DFS release, combining the two divisions will give Lemire broad authority over issues ranging from student loans to Holocaust claims. MBA will continue work with the NYMBA to monitor DFS’s action to determine if this announcement represents the expansion of the Department’s existing mandates regarding lender examinations and enforcement.
For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruitt at (202) 557-2870.
Remote Online Notarization is now Law in Iowa and Washington
This week, Iowa Governor Kim Reynolds and Washington Governor Jay Inslee signed legislation to make Iowa (SF475) and Washington (SB5641) the seventh and eighth states to enact RON in 2019. There are now 18 states that have established RON as a permissible method of performing notarizations for real estate finance transactions. Both bills follow the contours of the MBA-American Land Title Association (ALTA) model state RON bill, which is helping to establish a national consensus among state policy makers for RON laws and rules. To view the model bill, all the support materials for the MBA-ALTA campaign, and the latest RON developments, please visit MBA’s RON Resource Center at www.mba.org/RemoteOnlineNotarization.
For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruitt at (202) 557-2870.
Sign Up for the Fourth Annual MAA Action Week
The Mortgage Action Alliance (MAA), MBA’s free grassroots lobbying network, will be holding its fourth annual Action Week May 13-17. Action Week is a national, industry-wide campaign dedicated to helping real estate finance professionals learn how to become more engaged in political advocacy.
Last year, 49 companies ran company-wide enrollment campaigns, 20 state and local associations recruited new MAA members, and 12 individuals spread the word on social media to their professional networks.
This year, our goal is to recruit 100 organizations (companies, state/local associations and individuals) to run concurrent enrollment campaigns in an effort to activate all MAA members during Action Week. Join the growing list of companies participating in MAA Action week.
Sign up and MBA Staff will provide materials and resources to help support your efforts.
For more information, please contact Alden Knowlton at (202) 557-2816.
Compliance Essentials Webinar on ECOA Case Law
Join MBA Education and the Compliance Essentials program on May 15 to examine the roots of ECOA regulations and how courts have interpreted them in shaping the current body of fair credit law. In particular, the webinar will discuss the courts’, as well as the CFPB’s, views of disparate impact under ECOA and the status of disparate impact under the current administration. The webinar will conclude with observations about complying with ECOA in a changing regulatory and legal environment. To register for this webinar, please click here.
For more information, please contact Lisa Volb at LVolb@mba.org or 202-557-2919.
Last Chance to Register for MBA’s Legal Issues and Regulatory Compliance Conference, May 5 – 8 in New Orleans, LA
MBA’s Legal Issues and Regulatory Compliance Conference is happening next week, May 5–8, 2019, at the Hyatt Regency in New Orleans, LA. The conference has earned a reputation for being the “must attend” annual event, tailored to mortgage compliance and legal issues. There will be over 40 sessions covering regulation, legislation, and litigation. The conference is also a great way for attorneys to satisfy their continuing education or CLE credits, including getting an Ethics credit. To register, go here.