Bicameral Progress on IRS Modernization
On Tuesday, the full House of Representatives passed H.R. 1957, the Taxpayer First Act of 2019, by voice vote. H.R. 1957 and its Senate companion, S. 928, introduced by Senators Charles Grassley (R-IA) and Ron Wyden (D-OR), is the first legislative reform to the Internal Revenue Service (IRS) in nearly two decades. Among the many provisions, the bill includes language to automate the 4506T tax transcript process. MBA submitted a letter supporting the validation of income as an important component of sound residential mortgage lending. The Senate Finance Committee held a hearing on modernization and reform issues on Wednesday with IRS Commissioner Charles Rettig. In addition to discussing general IRS reform, Chairman Grassley used this opportunity to discuss the importance of H.R.1957/S. 928, and said it is his hope that the Senate will take action on this bill quickly. Debate around the bill’s provision that codifies the IRS’s “Free File” system will determine how quickly it moves through the Senate.

For more information, please contact Tallman Johnson at (202) 557-2866 or Bill Killmer at (202) 557-2736.

HFSC Subcommittee Discusses Community Reinvestment Act
On Tuesday, the House Financial Services Committee (HFSC) held a hearing in the Subcommittee on Consumer Protection and Financial Institutions entitled, “The Community Reinvestment Act (CRA): Assessing the Law’s Impact on Discrimination and Redlining.” The witnesses included advocacy groups, academics and a reporter. During the hearing, Subcommittee Chairman Greg Meeks (D-NY) advocated for the elimination of “loopholes” in CRA, specifically in three areas: (1) instances where CRA credit is provided on loans in low- and moderate-income (LMI) assessment areas even when those loans are not to LMI borrowers; (2) the application of CRA when a bank has a deposit-taking branch in an assessment area; and, importantly, (3) in cases when CRA does not yet apply to non-bank lenders. Republicans such as HFSC Ranking Member Patrick McHenry (R-NC) and Subcommittee Ranking Member Blaine Luetkemeyer (R-MO) advocated for CRA modernization that reflects new financial-service delivery methods. MBA will carefully monitor this dialogue as it progresses to ensure that effective CRA reform for banks moves forward, and that CRA burdens are not extended to non-depository institutions.

For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

Secretary Steven Mnuchin Testifies in House Financial Services
On Tuesday, the House Financial Services Committee (HFSC) heard from Treasury Secretary Steven Mnuchin at a sometimes spirited hearing entitled, “Annual Testimony of the Secretary of the Treasury on the State of the International Financial System”. During the hearing’s period reserved for questions and answers, Mnuchin faced a broad range of inquiries, including a focus on both the role of the Financial Stability Oversight Council (FSOC) and implementation of Financial Accounting Standards Board's (FASB) Current Expected Capital Loss (CECL) accounting standard. Some committee members expressed concerns that CECL could have “drastic pro-cyclical” repercussions on the GSEs and credit unions. Rep. Blaine Luetkemeyer (R-MO) asked whether Treasury would support a delay of implementation in order to conduct a quantitative impact study. Sec. Mnuchin replied that FSOC is discussing CECL and that he hopes Treasury can work together with Congress on GSE reform on a bipartisan basis.

For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

OMB Asserts Authority Over Regulatory Actions by the Fed, FHFA and Other Independent Agencies
Yesterday the Office of Management and Budget (OMB), an agency in the Executive Office of the President, released a memo instructing the independent government agencies such as CFPB, FHFA, the Fed and others on the need to provide for Congressional review under the Congressional Review Act (CRA) of almost all of their actions—notice and comment rulemakings, interpretative rules or statements of policy and guidance. (There are some defined limited exceptions, such as for Fed monetary policy decisions.) Most significantly, the memo instructs these agencies to get a determination from OMB if a particular action is a “major” rule as defined by the CRA before taking any action to implement it. This requirement could significantly delay independent agency action while these OMB reviews are occurring. It is also a clear shift from past practice, where these agencies did not have their actions subject to oversight by other parts of the Executive branch. 

For more information, please contact Justin Wiseman at (202) 557-2854. 

Senate Confirms Cheryl Stanton to Head DOL’s Wage and Hour Division
On Wednesday, the U.S. Senate voted to confirm Cheryl Stanton to lead the Labor Department’s Wage and Hour Division, which is tasked with enforcing federal labor laws such as overtime and prevailing wage requirements. The Senate voted along party lines, 53-45, to confirm Ms. Stanton. President Donald Trump first nominated Stanton for the position in September 2017, but the Senate did not take action to confirm her in the 115th Congress. MBA sent a letter of support for Stanton on February 2, 2018. 

For more information, please contact Tallman Johnson at (202) 557-2866 or Bill Killmer at (202) 557-2736.

MBA Submits Comments on Agencies’ Community Bank Leverage Ratio (CBLR) Proposal
On Monday, MBA submitted comments on the proposed CBLR framework issued by the OCC, Fed and FDIC (agencies) in February. The proposal, which was congressionally mandated, provides guidance to taxpayers on implementation of Section 201 of the Economic Growth, Regulatory Relief and Consumer Protection Actof 2018. Section 201 established a simple alternative methodology to measure capital adequacy for eligible community banks, providing significant regulatory relief. The agencies’ proposal provides eligibility factors and other required guidance for community banks that want to opt in to the new simplified regulatory capital rules. MBA appreciated the agencies’ efforts to provide clear and useful guidance, but strongly opposes both the inclusion of a 25% MSA threshold as an eligibility factor, and the proposed 9% CBLR level as the acceptable level under the framework. These requirements would disqualify many small community banks for which the simplified framework is actually intended. MBA recommended that the agencies increase the MSA threshold to a minimum of 50%, and reduce the acceptable CBLR level to 8%. This would allow more community banks, especially the smallest banks in rural areas, to qualify for this simplified regulatory capital framework. 

For more information, please contact Fran Mordi at (202) 557-2860.

Important Advocacy Victory in Maryland -- Harmful Licensing Law Defeated 
In another victory for coordinated and sustained industry advocacy, legislation (SB 485/HB 593) introduced at the request of the Maryland Attorney General to amend the state’s Collection Agency Licensing Act (MCALA) to require statutory trusts to become licensed debt collection agencies was ultimately defeated when the Maryland legislature adjourned on Monday of this week. The legislation would have reversed the well-reasoned decision of the Maryland Court of Appeals in Blackstone v. Sharma, 461 Md. 87 (2018), where the court held that statutory trusts created for the purpose purchasing and holding mortgage backed securities did not require licensure. A coalition led by MBA and the Maryland Mortgage Bankers and Brokers Association ensured the defeat of what could have been a harmful, first-in-the-nation licensing bill that would have increased servicing costs without any substantive new protections or benefits for consumers. The advocacy effort included testimony in the Senate andHouse of Delegates, in-person meetings with legislators on key committees, as well as several Mortgage Action Alliance (MAA) Calls to Action.

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruittat (202) 557-2870.

Remote Online Notarization Campaign Continues: Maryland Legislature Passes RON Bill
This week, following the unanimous approval by the Maryland Senate, the state’s House approved SB 678 to permit remote online notarizations (RON) in the state. If signed by Governor Hogan, Maryland will join five other states – Utah, Kentucky, North Dakota, South Dakota and Idaho – that have enacted RON laws in the past month, with progress observed in several other states. SB 678 follows the contours of the MBA-American Land Title Association (ALTA) model state RON bill which, with the help of MISMO’s draft model RON implementation standards, is helping establish a national consensus among state policy makers for RON laws and rules. To view the model bill, all support materials for the MBA-ALTA campaign and the latest RON developments, please visit the MBA’s RON Resource Center.

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

MBA Hosts Successful National Advocacy Conference
Over 400 industry advocates from over 40 states attended MBA’s annual NationalAdvocacy Conference (NAC) earlier this week. The conference program included a slate of congressional and administration speakers including HUD Secretary Ben Carson, Senate Banking Committee member Doug Jones (D-AL), key HFSC member and subcommittee chair Greg Meeks (D-NY), “Problem Solvers” Caucus members Rep. Josh Gottheimer (D-NJ) and Rep. Steve Watkins (R-KS), and Fox News Anchor Chris Wallace – in addition to a memorable reception with elected officials in the Great Hall at the Library of Congress.

On Wednesday, 300 attendees participated in 272 official constituent meetings with their senators and representatives on Capitol Hill. The NAC Hill Day once again included a tailored Commercial/Multifamily track. Our CREF members heard directly from speakers including key Senate Banking Committee and Senate Finance Committee member Tim Scott (R-SC), HFSC member Brad Sherman (D-CA), along with key staff from the office of House Speaker Nancy Pelosi (D-CA), the Senate Banking Committee, Senate Appropriations Committee, and the Senate Health, Education, Labor, and Pensions (HELP) Committee.

For more information please contact Bill Killmer at (202) 557-2746 or Alden Knowlton at (202) 557-2816.

Senate Confirms Calabria to Lead the FHFA
Yesterday the Senate confirmed Mark Calabria to serve as Director of the Federal Housing Finance Agency (FHFA). MBA President and CEO Bob Broeksmit released astatement congratulating the Director and vowing to work with FHFA to resolve the future of Fannie Mae and Freddie Mac. As expected, the vote tally was 52-44, falling along party lines. Earlier this week, MBA joined other industry trade groups in a letter urging the Senate to approve Calabria's nomination. This followed a previous letterMBA sent to the Senate Banking Committee urging the Committee to support Calabria’s nomination. 

For more information, please contact Erin Barry at (202) 557-2913 or Tallman Johnson at (202) 557-2866.

Legislation Introduced to Address 'Orphaned' VA Loans
Last week, a bipartisan group of congressmen led by David Scott (D-GA), Lee Zeldin (R-NY), Mike Levin (D-CA), and Andy Barr (R-KY) introduced the Protect Affordable Mortgages for Veterans Act of 2019 (H.R. 1988), which preserves critical protections for veterans by allowing previously “orphaned” VA Home Program refinance loans to be pooled in the Ginnie Mae secondary market (while also maintaining strong refinancing reforms enacted into law last May). H.R. 1988 is very substantially similar to legislation passed by voice vote last September in the House of Representatives during the 115thCongress.

Section 309 of last year’s regulatory reform law (previously known as S. 2155, now Public Law 115-174) sought to address the problem of loan churning targeted at service members and veterans. This section instituted new requirements that refinanced loans must meet to be eligible for the VA guaranty and for Ginnie Mae pooling. A gap between the timing dictated in S. 2155 and the implementation of the new rules left approximately 2,500 VA-guaranteed loans ineligible for pooling. These “orphaned loans” are barred from the secondary market, creating a strain on liquidity for the institutions involved. H.R. 1988 would provide a technical fix to correct this gap, maintain liquidity in the VA Home Loan market and ensure continued access to affordable VA mortgages. MBA submitted a letter of support for H.R. 1988 this week as well. Efforts remain underway with Senate offices to have a parallel measure introduced and advanced.

For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

FHFA Directs GSEs to Disburse Affordable Housing Funds
Earlier this week, FHFA announced that it authorized Fannie Mae and Freddie Mac to release over $376 million to the Housing Trust Fund operated by HUD and the Capital Magnet Fund operated by the Treasury Department.

Legislation passed in 2008 requires the GSEs to set aside an amount equal to 4.2 basis points of the unpaid principal balance of their new business for these affordable housing funds. FHFA suspended these payments shortly thereafter due to the poor financial condition of the GSEs, though it lifted this suspension in 2014.

MBA has long advocated for continued funding of these affordable housing initiatives as a critical step toward improved borrower access to credit, a reasonable requirement of GSEs with public charters, and a necessary component of any practical GSE reform effort.

For more information, please contact Dan Fichtler at (202) 557-2780.

House Financial Services Committee Focuses on the Fair Housing Act
On Tuesday, the House Financial Services Committee (HFSC) held a hearing on the state of fair housing and housing-related discrimination in America. The Committee heard testimony from representatives from the National Fair Housing Alliance, Greater New Orleans Fair Housing Action Center, the National LGBTQ Task Force, Zillow Group, and the Mercatus Center at George Mason University. During Q&A, Chairwoman Rep. Maxine Waters (D-CA) focused her questions on lawsuits involving Facebook and technology-based discrimination in the housing market, while Rep. Ann Wagner (R-MO) discussed HUD’s need for impactful tools and resources to enforce the Fair Housing Act and misuses of Community Development Block Grants.

Four pieces of legislation were announced in conjunction with the hearing including theRestoring Fair Housing Protections Eliminated by HUD Act of 2018, the Equality Act of 2019, the Housing Fairness Act of 2019, and the Sexual Harassment Awareness and Prevention Act of 2018. The committee memorandum with summaries of the legislation can be found here.

For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

Legislation Approved to Combat Illegal Robocalls Heads to Full Senate
On Wednesday, the full Senate Commerce Committee approved S. 151, the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act, by voice vote. Introduced by Senators John Thune (R-SD) and Ed Markey (D-MA), this bipartisan bill would amend the Telephone Consumer Protection Act (TCPA) by requiring voice service providers to establish a call-authentication network to combat spoofing and significantly increase the penalties that the FCC can charge for violations of the statute. Senator Thune offered a substitute amendment for the measure during the committee markup, and Senator Jerry Moran (R-KS) further amended the bill by providing for a TCPA annual enforcement report. Both amendments were accepted by voice vote. The bill now moves to the Senate floor for consideration.

For more information, please contact Tallman Johnson at (202) 557-2866 or Bill Killmer at (202) 557-2736.

FASB Rejects Recommendation to Tweak CECL
On Wednesday, the Financial Accounting Standards Board (FASB) voted to reject a recommendation by a coalition of midsized banks to tweak some sections of CECL that would help eliminate confusion for auditors, investors, and the banks. FASB stated that the recommendation would force institutions and auditors to make complex judgments or decisions about whether loans qualified for a 12-month forecast. FASB also concluded that stakeholders had ample opportunity to raise these issues prior to finalization of CECL. While this conclusion essentially makes it clear that FASB is not open to making any complex tweaks to CECL before the 2020 implementation date, the Board did not mention whether it was considering delaying implementation, or whether it would consider any other tweaks that are not deemed to be too complex to be incorporated at this time. A recording of the meeting is available on FASB’s website. 

For more information, please contact Fran Mordi at (202) 557-2860.

Regulators Issue Additional FAQs and Answers on CECL
On Wednesday, the same day that FASB rejected recommendations from a coalition of midsized banks to tweak some aspects of CECL, the OCC, FDIC, Fed Reserve, and NCUA (the regulators) released a set of FAQs and answers on CECL implementation. The document updates answers to previously issued questions in response to recent developments. The questions and answers address a broad range of issues, including how CECL changes existing U.S. GAAP, which includes replacing the existing incurred loss methodology with CECL; stress test modeling and scenarios; internal control considerations related to data; and the continued relevance of concepts, processes, and practices in existing supervisory guidance on the allowance for loan and lease losses. It also provides updates on the recent amendment of CECL effective date for nonpublic business entities. 

For more information, please contact Fran Mordi at (202) 557-2860.

MBANow Discusses MLO Temporary Authority; Conference of State Bank Supervisors to Address Implementation at MBA Legal Issues Conference
In an MBANow video interview released this week, MBA staff discuss the implementation of MLO Temporary Authority, and the steps companies should be taking to prepare ahead of November 24, 2019, when the new law becomes operational. Specifically, state-licensed companies should be building expanded tracking systems to monitor new licensing activity by their MLOs and anticipating new operational contingencies that may be necessary under the new federal law. Many of these potential challenges are discussed in frequently asked questions released by state regulators on the NMLS.org website, and as a starting point all MLOs and state-licensed companies should review them. MBA will also host the staff from the Conference of State Bank Supervisors (CSBS) at the upcoming MBA Legal Issues and Regulatory Compliance Conference in a dedicated session to review how implementation will work on the NMLS system. Lastly, MBA Education will also be holding webinars with CSBS that will be announced soon. 

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruittat (202) 557-2870.

Remote Online Notarization Progress Continues In States as Arizona Legislature Sends Bill to Governor
This week, following the unanimous approval by the Arizona Senate in February, the state’s House gave SB-1030 its unanimous approval. If signed by Governor Doug Ducey, the bill would authorize remote online notarization (RON) in the state. This early April action follows a month in which five states – Utah, Kentucky, North Dakota, South Dakota, and Idaho – enacted RON laws. If approved in Arizona, there will be 16 states that have established RON as a permissible method of performing notarizations for real estate finance transactions. SB-1030 follows the contours of the MBA-American Land Title Association (ALTA) model state RON bill, which, with the help of MISMO’s draft model RON implementation standards, is helping establish a national consensus among state policy makers for RON laws and rules. To view the model bill, all support materials for the MBA-ALTA campaign, and the latest RON developments, please visit MBA’s RON Resource Center. 

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruittat (202) 557-2870.

MBA Education Webinar on UMBS Readiness
Join MBA Education on April 10 for a look at UMBS readiness and the critical information your staff needs to be aware of. This webinar will provide an overview of the driving force behind the Single Security Initiative, how the structure of the mortgage industry will (and will not) change, and what mortgage lenders, servicers and third-party providers need to know to participate in the new To-Be-Announced (TBA) marketplace. Furthermore, attendees will develop an understanding of how the UMBS impacts sellers (mortgage bankers, originators, and aggregators) as well as origination, servicing, and hedging processes. To register for this webinar, please click here.

For more information, please contact Laura Vanegas at (202) 557-2785.

MBA Releases The Roadmap to CFPB 2.0
On Monday, MBA released a new paper, The Roadmap to CFPB 2.0, which details recommendations to ensure stability and consistent consumer protections in the Consumer Financial Protection Bureau's practices and consumer financial laws. The paper draws from the detailed responses MBA submitted to the series of 12 requests for information (RFIs) the Bureau released in 2018 seeking suggestions for how it could better align its supervisory practices and the regulations it administers with its statutory mandate and generally accepted principles of sound prudential regulation. MBA CEO Bob Broeksmit, CMB, issued a statement and published a blog post announcing theRoadmap. The Roadmap is a follow-up to MBA’s 2017 paper, CFPB 2.0: Advancing Consumer Protection.

For more information, please contact Justin Wiseman at (202) 557-2854.

Trump Administration Releases 2020 Budget Proposal
On Monday, the Trump Administration released its budget proposal for Fiscal Year 2020.  The Trump blueprint includes the following key elements:

GSEs

• Recommends an increase of the 10-basis point tax on g-fees to 20 basis points and would extend the tax to 2023 (currently set to expire in 2021);
• Recommends suspending contributions to the Housing Trust Fund and the Capital Magnet Fund;
• With respect to GSE reform efforts, “The Administration has publicly expressed its desire to work with members of Congress to facilitate a more sustainable housing finance system.”

HUD/FHA/Ginnie Mae

• Requests $44.1 billion in funding for HUD, an $8.7 billion or 16.4 percent decrease from the 2019 request;
• Proposes a lender fee to raise $20 million to fund FHA IT infrastructure improvements;
• Requests $550 billion in new guarantee authority for Ginnie Mae;
• Eliminates funding for CDBG and HOME Investment Partnership Programs.

VA

• Requests $93.1 billion in funding for VA, a $6.5 billion or 7.5 percent increase from the 2019 enacted level;
• Provides $4.3 billion for technology improvements, an increase of more than $200 million.

USDA/RHS

• Requests $20.8 billion in funding for USDA, a $3.6 billion or 15 percent decrease from the 2019 estimate

The annual budget proposal is a framework that does not have the force of law, and represents the first step in the much lengthier federal budget/appropriations process. Throughout the process of discussing key elements of the budget plan, MBA will work to ensure continued support for vibrant real estate markets that benefit all market participants.

For more information, please contact Pete Mills at (202) 557-2878 or Bill Killmer at (202) 557-2736.

MBA’s National Advocacy Conference
This year’s National Advocacy Conference (NAC) will take place April 2-3 at the Capital Hilton in Washington, D.C. NAC is an annual tradition that enables MBA members to speak directly to their elected officials as advocates for our industry. Speakers at NAC will include HUD Secretary Ben Carson, Senate Banking Committee Member Senator Doug Jones (D-AL), House Financial Services Committee member Rep. Greg Meeks (D-NY) and Fox News Anchor Chris Wallace – in addition to a memorable reception with elected officials in the Great Hall at the Library of Congress. Register today to be a part of our industry's largest advocacy event of the year.

For more information, please contact Alden Knowlton at (202) 557-2816.

Senate Banking Committee Receives Consumer Financial Protection Bureau Semi-Annual Report
This past Tuesday, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing entitled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” The Honorable Kathy Kraninger, Director of the CFPB, was the sole witness. A summary of the hearing can be found here.

Chairman Mike Crapo (R-ID) noted the positive steps the CFPB took recently regarding HMDA reporting requirements, and said he hoped the CFPB would identify opportunities to update the Fair Credit Reporting Act so that it works in a digital world. Senator Mark Warner (D-VA) expressed concern—and Director Kraninger agreed—that the termination of the QM Patch would be detrimental to affordable housing and said he was optimistic that the Senate would find a legislative solution. Ranking Member Sherrod Brown (D-OH) and other Committee Democrats were sharply critical of Director Kraninger and the CFPB’s efforts to eliminate the ability to repay requirement in its payday loan rule, its decision to discontinue Military Lending Act compliance examinations, and the decline in CFPB enforcement activity with regard to fair lending and student loan servicing.

For more information, please contact Tallman Johnson at (202) 557-2866 or Erin Barry at (202) 557-2913.

Senate Banking Committee Holds Hearing on FSOC Designations
Yesterday, the Senate Committee on Banking, Housing, and Urban Affairs held ahearing entitled, “Financial Stability Oversight Council Nonbank Designations.” Witnesses were Dr. Douglas Holtz-Eakin, American Action Forum, Mr. Paul Schott Stevens, Investment Company Institute, and Professor Jeremy Kress, University of Michigan Ross School of Business.

During the question and answer portion of the hearing, Senator Mike Rounds (R-SD) highlighted S. 603, the FSOC Improvement Act that would require FSOC to consider non-designation alternatives but would not take away from FSOC’s emergency designation process.  Chairman Mike Crapo (R-ID) noted S. 603 in his statement and emphasized that FSOC’s designation process must be clear, robust and focused on addressing real underlying risks.

For more information, please contact Tallman Johnson at (202) 557-2866 or Erin Barryat (202) 557-2913.

House Panel Discusses National Flood Insurance Program
This past Wednesday, the House Financial Services Committee held a two-panel hearing entitled “Preparing for the Storm: Reauthorization of the National Flood Insurance Program.” The first panel featured six members of Congress while the second featured a broad array of industry participants. Before the hearing, Chairwoman Maxine Waters (D-CA) introduced a package of legislation to reform and reauthorize the long-debated insurance backstop. The package would extend the program until 2024, provide discounted premium rates for people with lower incomes, expand flood mapping, and cancel the program’s debt of more than $20 billion. While Republicans agree with the majority that the program requires significant overhaul ahead of its May 31 expiration, forgiving the program’s mounting debt was noted by GOP members as a non-starter. While both Chairwoman Waters and Republicans said they hoped to work together to tackle the issues and reauthorize the program, odds are long that legislation could be agreed upon given the time frame. Current expectations are for bipartisan discussions to continue while another short-term extension of the program is enacted close to the deadline.

A copy of the official hearing memorandum can be found here and a summary of the hearing can be found here.

For more information, please contact Dan Grattan at (202) 557-2712 or Bill Killmer at (202) 557-2736.

FHA Expands Manual Underwriting to Address “Risk Layering”
Earlier this week, FHA released a memo describing new steps to address increasing risks in its single-family portfolio. Effective for loans with case numbers assigned on or after March 18, 2019, updates to the TOTAL Mortgage Scorecard will require manual underwriting for certain loans with higher-risk characteristics.

While the memo references an earlier FHA policy requiring manual underwriting for loans with credit scores below 620 and DTI ratios above 43 percent, the new guidance does not include specific thresholds.

MBA will engage with FHA and provide further information as it becomes available.

For more information, please contact Dan Fichtler at (202) 557-2780.

MBA and State Associations Submit Testimony to Oppose Changes to Maryland Licensing Law
On Tuesday, MBA was joined by the Maryland Mortgage Bankers and Brokers Association, the Maryland Bankers Association, and the Maryland Realtors in testimonyopposing legislation (SB 485), which would revise the implementation of the Maryland Collection Agency Licensing Act (MCALA) and require statutory trusts to become licensed debt collection agencies. SB 485 and its companion in the Maryland House (HB 593) would reverse the well-reasoned decision of the Maryland Court of Appeals in Blackstone v. Sharma, 461 Md. 87 (2018) where the court held that statutory trusts created for the purpose purchasing and holding mortgage backed securities did not require licensure. Moreover, the legislation would not address perceived servicing issues that were described by the proponents of the legislation in the House and Senate Committee hearings and would negatively affect the ability to originate, sell, hold and enforce mortgages in the state. MBA staff recently met with the offices of Senator Brian Feldman (Vice Chair of Senate Finance) and Representative Dereck Davis (Chair of House Economic Matters) to discuss the risk to lending in Maryland and the potential harm to consumers by requiring statutory trusts to be licensed.

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruittat (202) 557-2870.

Flawed New Mexico Remote Online Notarization Bill Withdrawn; Law Enacted in North Dakota and Progress Being Made in Other States
Following a second industry coalition letter and a Mortgage Action Alliance Call to Action opposing well-intentioned but flawed remote online notarization (RON) legislation (HB-470) in New Mexico, the bill was withdrawn by its sponsor ahead of the legislature’s anticipated adjournment this week. Coalition partners – MBA, the New Mexico Mortgage Lenders Association, the American Land Title Association, and the New Mexico Land Title Association – gave assurances that they would help develop a bill for 2020 that would better conform to the emerging national consensus regarding RON and that would embrace the industry’s core RON principles including: the need for robust provisions for ID proofing and credential analysis; that acknowledgements performed online can be readily identified and distinguished from those done in person; that technology requirements should not be so specific as to favor one vendor over another; and that legislation should conform to other legal standards and laws. The MBA-ALTA RON principles have been embraced in adopted and proposed legislation in several states, including North Dakota, which this week enacted HB-1110 to authorize RON. Bills continue to progress in several others states including South Dakota and Utah, where bills are awaiting gubernatorial consideration.

For more information, please visit MBA’s RON resource page or contact William Kooperat (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

Compliance Essentials Webinar on Social Media and Digital Advertising Regulations
Join MBA on March 20 for a conversation on the increasing use and application of social media and digital advertising platforms with regard to the mortgage finance industry and associated risks arising within that context. Social media is a rapidly evolving and powerful tool to generate revenue, reach new customers, and increase brand recognition. That power brings many potential pitfalls and scrutiny from regulators that impact almost everyone in your company. To register for this webinar, please click here.

For more information, please contact Lisa Volb at (202) 557-2919.

Broad Coalition Urges Policymakers to Prioritize Market Stability in Administrative GSE Reform Efforts 
Earlier today, MBA was joined by 27 organizations, representing a broad cross-section of consumer and industry organizations, in sending a letter to FHFA Acting Director Otting on priorities for preserving access and affordability when undertaking administrative reforms to Fannie Mae and Freddie Mac. Specifically, the coalition advised that GSE reform must seek to further two key objectives: 1) preserving what works in the current system, while 2) maintaining stability by avoiding unintended adverse consequences for borrowers, lenders, investors, or taxpayers.

In its letter to Otting, the coalition also noted that “comprehensive legislative reform … is ultimately necessary in order to codify structural changes that ensure safety and soundness and provide the certainty needed for private capital to establish a more reliable presence in housing finance.” MBA continues to call on Congress to institutecomprehensive reforms to address the structural problems in the GSE charters and business models that contributed to the financial crisis a decade ago.

For more information, please contact Dan Fichtler at (202) 557-2780.

Senate Banking Committee Advances Calabria as Head of FHFA
On Tuesday, the Senate Banking Committee voted to advance the nomination of Mark Calabria as director of the Federal Housing Finance Agency.  The vote passed along party lines, 13 to 12. MBA President and CEO Bob Broeksmit sent a letter of supportand called on the Senate to confirm Calabria when his nomination heads to the Senate floor in the coming weeks.  Also on Tuesday, the Senate panel approved nine other nominations by President Donald Trump, which included Bimal Patel to be Assistant Secretary for Financial Institutions at Treasury, Todd Harper and The Honorable Rodney Hood to be members of the National Credit Union Administration Board, Dino Falaschetti to be Director of Treasury’s Office of Financial Research, and HUD Assistant Secretary nominees Seth Appleton (Policy, Development, and Research) and Hunter Kurtz (Public and Indian Housing).

For more information, please contact Dan Grattan at (202) 557-2712 or Tallman Johnson at (202) 557-2866.

FHFA Finalizes Rule to Align GSE MBS Cash Flows Ahead of Single Security Launch
Earlier this week, FHFA finalized a rule to better align the cash flows of certain Fannie Mae and Freddie Mac single-family securities. This alignment process is being undertaken to support implementation of the Single Security Initiative.

In November, MBA submitted comments on the FHFA proposal, noting that “the development of the [Uniform MBS] and the Common Securitization Platform…will represent a vastly improved single-family secondary mortgage market infrastructure.” MBA recommendations around alignment monitoring, corrective actions in response to misalignment, and transparency in setting alignment thresholds were incorporated into the final rule.

As a reminder, issuance of the Uniform MBS is expected to begin on June 3, 2019. MBA hosted a webinar in December to help prepare members for the transition.

For more information, please contact Dan Fichtler at (202) 557-2780.

Fed Chairman Powell Addresses GSE Reform, CECL 
Federal Reserve Chairman Jerome Powell addressed both the House and Senate this week and answered questions on GSE reform and Current Expected Credit Losses (CECL) accounting standard. During Powell’s hearing in the Senate, Banking Committee Chairman Mike Crapo (R-ID) noted his committee will be aggressively trying to put together a bipartisan solution to address GSE reform. Chairman Powell stated that it is one of the biggest pieces of unfinished business in the post-crisis reform era, and offered that recent proposals have the right elements to ensure that significant private capital stands in front of taxpayers. Powell pledged to work with the committee in its effort, offering the services of the Fed’s staffers with housing expertise. In the House, Financial Services Committee Ranking Member Patrick McHenry (R-NC) raised the importance of GSE reform, to which Powell suggested that it should be a priority for Congress.

Also in the House, Rep. Brad Sherman (D-CA) called CECL an “esoteric accounting theory discussion gone awry.” He asked Powell if he thinks a quantitative impact study is required to understand whether CECL implementation will limit lending, especially in economic downturns. Chairman Powell said they will implement CECL and that there was no such study required, though he said they will be watching closely thereafter and will take appropriate action if needed. 

For more information, please contact Dan Grattan at (202) 557-2712 or Tallman Johnson at (202) 557-2866.

Appendix Q Legislation
This week, Senators Mark Warner (D-VA) and Mike Rounds (R-SD) reintroduced the Self-Employed Mortgage Access Act, which addresses the challenges presented in documenting the ability to repay for borrowers with non-traditional forms of income. Senator Cory Booker (D-NJ) joined as an original cosponsor. The legislation, which embodies recommendations made by MBA to the Bureau of Consumer Financial Protection, would allow the use of existing underwriting standards such as those found in the Fannie Mae and Freddie Mac Seller/Servicer Guides or the FHA, VA, and USDA Handbooks as alternatives to Appendix Q. These existing standards could be used to satisfy the requirements needed for a loan to achieve Qualified Mortgage status. 

For more information, please contact Erin Barry at (202) 557-2913 or Tallman Johnsonat (202) 557-2866.

Consumer Data Privacy Hearings in the House and Senate
On Tuesday, the House Energy and Commerce Committee’s Subcommittee on Consumer Protection and Commerce held a hearing entitled, “Protecting Consumer Privacy in the Era of Big Data." The following day the Senate Commerce Committee held a hearing entitled, “Policy Principles for a Federal Data Privacy Framework in the United States.” The hearings restarted the congressional conversations and followed similar themes regarding consumer data collection and privacy. Members from both sides of the aisle in the House and Senate agreed that a federal standard is necessary. However, the Senate Commerce Committee Ranking Member, Senator Maria Cantwell (D-WA), stressed the importance of a strong federal standard that does not weaken state efforts to protect consumers. While the European Union’s General Data Protection Regulation and the California data privacy model are examples of consumer data protection standards, neither committee elevated those models as the starting point for a federal data standard. Consumer data protection requires additional monitoring given the bipartisan, bicameral interest in a federal standard. 

For more information, please contact Erin Barry at (202) 557-2913 or Dan Grattan at (202) 557-2712.

House Panel on Diversity and Inclusion Holds First Hearing
On Wednesday, the newly formed Diversity and Inclusion Subcommittee of the House Financial Services Committee held a hearing entitled, “An Overview of Diversity Trends in the Financial Services Industry.” The hearing had one witness, Daniel Garcia-Diaz, Director of Financial Markets and Community Investment at the U.S. Government Accountability Office (GAO). The hearing largely discussed the findings in the GAO report: Financial Services Industry: Trends in Management Representation of Minorities and Women and Diversity Practices, 2007-2015. The report was in response to a request by Chairwoman Maxine Waters (D-CA), along with Senator Sherrod Brown (D-OH) and Congressman Al Green (D-TX). Garcia-Diaz said that research shows there is still a shortage of women and minorities in leadership roles in the financial services industry. He also highlighted that the GAO study found the banking sector had the greatest representation of minorities in overall management, whereas the insurance industry had the highest proportion of women in overall management. 

For more information, please contact Bill Killmer at (202) 557-2736 or Dan Grattan at (202) 557-2712. 

Industry Coalition Opposes Flawed New Mexico Remote Online Notarization Bill
This week, in a letter drafted by MBA, an industry coalition weighed in on the flaws of proposed legislation (HB-470) in New Mexico to allow remote online notarization (RON). Joining MBA on the letter were the American Land Title Association (ALTA), the New Mexico Mortgage Lenders Association, and the New Mexico Land Title Association. The letter pointed out that while well intentioned, the legislation does not adhere to the industry’s core principles for state RON laws, which include: the need for robust provisions for ID proofing and credential analysis; that acknowledgements performed online can be readily identified and distinguished from those done in person; that technology requirements should not be so specific as to favor one vendor over another; and that legislation should conform to other legal standards and laws. These principles are at the core of the MBA-ALTA model RON state law and have been embraced in the adopted laws and proposed legislation of several states. They were also embraced by the non-partisan Uniform Law Commission (ULC) in its update to the Revised Uniform Law on Notarial Acts (RULONA) to include RON, which was released earlier this year. 

For more information, please visit MBA’s RON resource page or contact William Kooperat (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

MBA Education Webinar on California Consumer Privacy Act Join MBA Compliance Essentials and the California Mortgage Bankers Association on March 13, 2019, as subject matter experts discuss the new California Consumer Privacy Act (CCPA) and how it will impact lenders in California. While the CCPA is scheduled to go into effect in 2020, there are a number of tasks that every company needs to start doing right now. The CCPA is about giving California residents — including employees, vendors, and even visitors to your web site — more control over data that you have collected about them. To register for this webinar, please click here

For more information, please contact Lisa Volb at (202) 557-2919.

Click on a headline to read more:

• Mortgage rates fall for the third week in a row
  
  
• Interview with Mike Fratantoni, Chief Economist, Senior Vice President, Research and Industry Technology, Mortgage Bankers Association
  
  
• Q4 Mortgage Delinquencies at 18-Year Low

Feb. 26: Senate Committee on Banking, Housing and Urban Affairs: The Semiannual Monetary Policy Report to the Congress
Feb. 26: House Financial Services Committee: Who’s Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System
Feb. 26: House Appropriations Committee, Subcommittee on Financial Services and General Government: Leveraging Private Capital For Underserved Communities and Individuals: A Look Into Community Development Financial Institutions
Feb. 27: House Appropriations Committee: Subcommittee on Transportation, and Housing and Urban Development, and Related Agencies: Stakeholder Perspectives: Fair Housing
Feb. 27: House Financial Services Committee: Monetary Policy and the State of the Economy 
Feb. 28: Senate Committee on Banking, Housing and Urban Affairs: Legislative Proposals on Capital Formation and Corporate Governance 

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