State Relations Committee Update: Policy Highlights

House Passes MBA-Supported Trigger Leads Bill: Yesterday, the full U.S. House of Representatives passed its slightly amended version of the Homebuyers Privacy Protection Act of 2025 (H.R. 2808) by voice vote. The highly anticipated vote comes less than two weeks after the Senate passed a companion measure (S. 1467, slightly different from the House bill) by unanimous consent (voice vote). MBA thanks the nearly 2,000 Mortgage Action Alliance (MAA) members who participated in the call to action by asking their representative to vote in favor of the bill. In a press statement, MBA President and CEO Bob Broeksmit, CMB, said, “The passage of this consequential bill, on the heels of the Senate passing its similar bill on June 12th, is another important step forward in our fight to provide relief for consumers who face a torrent of unwanted emails, texts, and phone calls the moment they apply for a mortgage. After two years of unrelenting advocacy efforts, MBA and its members are more optimistic than ever that the abusive use of mortgage credit trigger leads is close to an end.” Six months after enactment, the legislation would eliminate the abusive use of mortgage credit trigger leads while preserving their deployment in appropriately limited circumstances. Under this bill, trigger leads would be permissible under the Fair Credit Reporting Act only in limited circumstances during a real estate transaction and only to provide a firm offer of credit. A credit reporting agency (“CRA”) would not be able to furnish a trigger lead to a third party unless the third party has certified to the CRA that either: The consumer explicitly consents to such solicitations; The third party has originated the current residential mortgage loan of the consumer; The third party is the servicer of the current residential mortgage loan of the consumer; Or the third party is an insured depository institution or insured credit union and holds a current account for the consumer. The Senate and House will need to reconcile the minor differences between the two bills. The House-passed bill contains language for an innocuous Government Accountability Office (GAO) study on the value of trigger leads by text message. MBA will continue to work with the bill sponsors and congressional leadership in both chambers to get a uniform bill passed and signed into law as quickly as possible.

MBA, Coalition Caution That Section 899 “Revenge Tax” Provision Has Implications for Commercial Real Estate Finance: Thursday, June 12, MBA joined 10 other commercial real estate organizations in a coalition letter to Senate Majority Leader John Thune (R-SD) and Senate Finance Committee Chair Mike Crapo (R-ID) that urges the Senate to revise the retaliatory tax measures in the House-passed budget reconciliation bill. A proposed provision, Section 899, aims to penalize countries that impose taxes deemed unfair, such as digital services taxes on technology companies and those levied under the OECD Pillar Two “Undertaxed Profits Rule.” The letter highlights the undersigned group’s concerns that as currently drafted, the provision could have significant and negative unintended consequences, including “higher mortgage rates, reduced housing supply, decreased investment in urban and rural communities, fewer jobs, and slower economic growth.” The letter calls for a revision of the proposed Section 899 provision to exempt non-controlling investments in U.S. real estate, regardless of whether those investment are made through equity or debt. Such an exemption is necessary to ensure U.S. taxpayers continue to have access to foreign capital for real estate investment. If passed without changes, the provision would increase tax rates – starting by 5% and able to rise an additional five percentage points each year until they reached 20% – on selected U.S.-generated real property interests, income, branch profits, and interest, dividends, and other income paid to certain foreign governments, individuals, corporations, and other persons. U.S. commercial real estate equity and debt attracts investment from across the world, and an increase in the taxes foreign investors pay on that investment could chill that flow of funds. Notably, any increases would affect not only future deals but also investments already in place. Even the uncertainty caused by Section 899 is said to have slowed investment activity. Different capital sources would be affected in different ways by the legislation, with some having existing tax treatment that addresses concerns and others having proposed changes to the legislative language under consideration. MBA and coalition partners will continue to educate lawmakers on the importance of the provision to commercial real estate markets and advocate for policy that would minimize the impact to commercial real estate finance.

Capital Framework Reform Takes Center Stage as Key Bank Nominee Sworn In: On Monday, June 9, Michelle Bowman was sworn in as Vice Chair for Supervision of the Board of Governors of the Federal Reserve System. Her term as Vice Chair for Supervision ends on June 9, 2029. Among her top priorities, Vice Chair Bowman cited “reviewing and reforming the capital framework to ensure that it is appropriately designed and calibrated.” In July, the Federal Reserve will bring together academics, capital experts, and bankers to explore whether capital requirements for large banks are currently functioning as intended. The capital conference will include discussions of potential reforms to the GSIB surcharge, Basel III capital requirements, leverage ratio requirements, and stress testing. In alignment with Vice Chair Bowman’s priorities, the Federal Deposit Insurance Corporation (FDIC) notified the Office of Information and Regulatory Affairs of its intent to publish a rule titled, “Modifications to Supplementary Leverage Capital Requirements for Large Banking Organizations; Total Loss-Absorbing Capacity Requirements for US Global Systemically Important Bank Holding Companies.” Under Vice Chair Bowman’s leadership, the Federal Reserve also plans to review capital requirements associated with the community bank framework. This review will include, “capital requirements like the calibration of the community bank leverage ratio, and whether reforms to the capital framework for mutual banks can be improved to promote capital formation.” In March, MBA provided a statement in support of Ms. Bowman’s nomination. She has shown a commitment to balanced oversight since becoming a member of the Federal Reserve Board of Governors in 2018. If approved, Administration officials anticipate supplementary leverage ratio reform will help support the Treasury market. Reform will also reduce the capital required on reserves at the Federal Reserve. In addition, MBA submitted recommendations in May to all of the federal banking agencies urging them to address excessively high risk weightings for mortgage servicing assets and warehouse lines of credit – key supports for the housing finance market – as part of any capital rule reforms. MBA will continue to engage with federal banking regulators to ensure our members’ viewpoints are reflected throughout the policymaking process.  

HUD Provides Express Lane for Healthcare Loans (Commercial): On Wednesday, June 11, the Department of Housing and Urban Development’s (HUD) Office of Residential Care Facilities (ORCF) announced a new program to provide expedited processing for certain 232 and 223f applications that demonstrate reduced risk. To qualify for the programs, applications must meet certain criteria, including a maximum loan amount, a maximum loan-to-value ratio of 70%, an experienced operator, and must follow specific debt service coverage ratio guidelines. Skilled nursing facilities are a growing market, and this new process will allow for shorter wait times for applications to be processed. MBA will continue to work with HUD to ensure efficiencies for its healthcare and multifamily programs.

Treasury Secretary Bessent Testifies before House and Senate Tax Committees: In mid-June, Secretary of the Treasury Scott Bessent testified before the House Ways & Means and the Senate Finance Committees. Secretary Bessent emphasized the Trump Administration’s commitment to revitalizing American industry, simplifying the tax code, and making permanent the reforms of the 2017 Tax Cuts and Jobs Act. Secretary Bessent also addressed concerns surrounding the so-called “899 issue,” a reference to Section 899 of the tax code, which affects foreign-owned U.S. real estate entities. He signaled that Treasury is reviewing the provision’s impact on cross-border investment, passive investments, and real estate capital flows, particularly considering the Administration’s broader push to incentivize domestic manufacturing and construction through the “One Big Beautiful Bill” (H.R. 1). While no immediate changes were announced, Secretary Bessent acknowledged industry calls for clarity and pledged to work with Congress on potential reforms that balance national interest with market competitiveness. Full summaries for the House hearing are here and for the Senate hearing here. Section 899 matters significantly to the real estate finance industry because it introduces potentially punitive tax measures that could disrupt foreign investment flows into U.S. real estate—an essential source of capital for the sector. Real estate investment trusts (REITs), private equity funds, and sovereign wealth funds—major players in U.S. commercial real estate—could face steep tax hikes, reducing their net returns and potentially deterring future investment. There are a number of key industry priorities contained within the House-passed “One Big Beautiful Bill.” Additionally, while there was discussion at the House hearing on Section 899, the Senate hearing focused on macro policy matters. At the Senate hearing, Republicans strongly pushed for the permanent extension of the 2017 Trump tax cuts, arguing it would boost investment, raise after-tax income, and prevent a record tax hike. Democrats voiced strident concerns about healthcare and Medicaid cuts, warning that up to 16 million people could lose coverage under the bill. On trade, Secretary Bessent strongly defended the Administration’s approach as a way to boost domestic manufacturing and raise revenue, while stating there are no indications that trade policy to date has impacted inflation. MBA will continue to educate and advocate for changes to how Section 899 affects the real estate finance industry, as well as lobby for the retention of the pro-industry provisions contained in the House-passed bill. MBA signed onto an industry trades letter to the Senate highlighting concerns with the House-passed Section 899 and is working on a separate letter with our members’ concerns. 

HUD Secretary Turner Testifies before Key House and Senate Panels: Earlier this month, the Department of Housing and Urban Development (HUD) Secretary Scott Turner testified on the agency’s Fiscal Year 2026 (FY 2026) budget proposal before both the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development, and Related Agencies (T-HUD). Secretary Turner defended a roughly $35.5 billion reduction in HUD’s budget request and asserted the need for a "new playbook" that emphasizes fiscal restraint and transferring diminished rental assistance programs to state control. To read the full hearing summaries for the respective hearings, click here and here. While the HUD budget request keeps Federal Housing Administration (FHA) and Ginnie Mae funding for salaries and expenses at or above FY 2025 levels, the funding request for Information Technology is reduced by $18 million from the 2025 enacted level. At the Senate hearing, Chairwoman Cindy Hyde-Smith (R-MS) expressed concern that the cross subsidy that other HUD programs receive from FHA Mortgage Insurance premiums will be reduced due to low loan volume and cautioned the Secretary that a statutory authorization is not in place to transfer funds to state programs, as requested. Senator Schatz (D-HI) encouraged the HUD Secretary to renew suspended grant programs that encourage zoning reforms and advance new regulatory reforms to expand the supply of affordable housing. In the House, Democratic members on the panel, led by Ranking Member James Clyburn (D-SC), rejected the agency-wide cuts as “unacceptable,” citing the elimination of programs such as CDBG, Section 8, and public housing as dangerous to seniors, veterans, and low-income households. In July, the respective full House and Senate Appropriations Committees will seek to mark-up different iterations of each chambers’ T-HUD funding bill for FY 2026. However, without an agreement on top line spending levels between the House and Senate, another continuing resolution at FY 2025 levels is the most likely outcome.

MBA, NYMBA Secure Positive Legislative Results in New York: New York’s legislative session came to a dramatic close last week with several positive outcomes thanks to coordinated advocacy by MBA and the New York Mortgage Bankers Association (NYMBA). This year, the Legislature considered nearly 40 artificial intelligence-related bills with the most concerning among them being lengthy companions bills (A8884/S1169) introduced in the final week. This proposed policy would have required multiple disclosures delaying the mortgage process, a right to manual underwriting, and required mortgages to close within forty-five days of the first disclosure. Advocates responding to a MAA Call to Action helped ensure the bill died in the Assembly. Another industry-supported effort included defeat of a damaging servicing bill (S6791) that would have changed foreclosure documentation requirements and made New York’s five-plus year foreclosure timeline process even more difficult, expensive, and time consuming. Also, the Land-Home Property Act (S7120), was passed, and if signed, will better align New York with its neighboring states for real property conversion and allow for additional financing on manufactured homes. Unfortunately, despite industry opposition efforts, the New York Attorney General’s bill (A8427a/S8416) to expand authority under the state’s unfair, deceptive, and abusive business practices (UDAP) was approved. All passed legislation now awaits consideration by the Governor, who has 10 days once any bill is transmitted to her office to approve or veto. MBA and the NYMBA will urge the Governor to endorse the Land-Home Property Act, and will highlight our industry concerns regarding the state’s UDAP expansion.

MBA, California MBA Lead Joint Trades Letter Opposing IMB CRA Bill: On Tuesday, June 10, MBA, the California MBA, the California Building Industry Association, and the Leading Builders of America submitted a letter to the Chair of the California Senate Banking Committee opposing legislation (AB 801) to impose a state-level Community Reinvestment Act (CRA) framework on independent mortgage banks (IMBs). The letter details the many reasons IMBs should not be subject to CRA and also discusses the bill’s numerous flaws, such as how CRA would add new expensive and unnecessary compliance obligations. It also highlighted the bill’s alarming provision that could result in the imposition of administrative penalties of up to $100,000 for failing to comply with these new requirements. The bill passed the Assembly in early June, but it was weakened by a sharply divided vote. While there are 60 Democrats in the Assembly, only 45 voted to approve and 15 voted either “no” or “abstain.” They were joined by all 19 Republicans.Waning support for the bill is the direct result of industry advocacy by MBA, the California MBA, and MAA members in California who responded to a Call to Action in recent weeks to urge “no” votes from their Assembly members in Sacramento.In the Senate, the bill will need to be approved by the Senate Banking and Senate Appropriations Committees to get to the floor. Each stop provides an opportunity to block it. MBA and the California MBA will continue to collaborate with allied industry trade groups, and MAA members in California should also be prepared for another Senate Call to Action in the coming weeks. For more information, please visit the MBA State CRA Resource Center.