Federal Banking Laws and Regulations

Federal banking laws and regulations generally govern many areas of the lending business, including dictating how much capital an institution is required to retain in order to be in compliance with regulatory capital rules; well as activities that an institution is required to engage in to satisfy its community reinvestment act (CRA) obligations under the regulatory rules.  Regulatory capital rules are complex and burdensome.  Basel III has added even more complexities to an already complex set of rules; and the U.S. is making efforts to simplify the rules for the smallest community banks.  Any efforts at simplification must take into account the unique nature of mortgage servicing rights, as well as recognize that treating this asset too harshly does not help simplify the rules, but in fact, continue to create unnecessary complexities and burdens for institutions that own this asset.  While CRA is still well and alive, the rules are outdated, and there is an overwhelming need for the regulators to modernize the rules.  MBA fully supports this call for modernization.

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