MBA Letters Urge House Committee Passage of Transitional Authority Legislation

Sorohan, Mike msorohan@mba.org

March 02, 2016

The Mortgage Bankers Association, in separate letters this week, urged the House Financial Services Committee to move forward legislation that would enable mortgage loan originators to move from one institution to another while working to meet SAFE Act licensing and testing requirements.  

H.R. 2121, the SAFE Transitional Licensing Act )https://www.congress.gov/bill/114th-congress/house-bill/2121), would provide transitional authority to originate mortgages for individuals who move from a federally insured institution to a non-bank lender while they work to meet the SAFE Act's licensing and testing requirements. Transitional authority would be available to mortgage loan originators who have a clean history as an originator (e.g., no license denials, revocations or suspensions, no cease and desist orders and no felonies that preclude licensing).  

MBA endorsed the language of the bill after consultation with the Conference of State Bank Supervisors, saying it would be a narrow and simple solution to allow individuals to continue working and underwriting loans, while in no way weakening the important consumer protections of the SAFE Act. 

In a Feb. 29 letter to the Committee, MBA Chairman Bill Emerson, CEO of Quicken Loans Inc., Detroit, noted the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 created two parallel but asymmetrical regimes for mortgage loan originators that have resulted in uneven consumer protections and an un-level playing field for mortgage originators. H.R. 2121 would rectify those regimes, Emerson said.  

"H.R. 2121 promotes a fair and competitive labor market by eliminating barriers to the ability of non-bank lenders (especially small lenders) to compete for talented staff and allowing MLOs to more easily move to the employer that offers them the best chance to succeed," Emerson wrote. "We urge the full committee to give this common-sense legislation its approval."    

MBA also supports H.R. 2901, the Flood Insurance Market Parity and Modernization Act (https://www.congress.gov/bill/114th-congress/house-bill/2901?q={"search":["\"hr2901\""]}&resultIndex=1). This bill would correct language in the Biggert-Waters Flood Insurance Reform Act of 2012 that had the unintended consequence of making it more difficult for private insurers to provide private flood insurance and for lenders to accept those policies. This bipartisan bill would amend the definition of "private flood insurance" to restore the discretion necessary to allow lenders, private insurers, and regulators to develop a functional private insurance market.  

"We support this solution because it would effectuate congressional intent and encourage the growth of a competitive and sustainable private flood insurance market," MBA Senior Vice President of Legislative and Political Affairs Bill Killmer said in a Mar. 1 letter. "Increased private sector involvement will expand available insurance options, lower costs to consumers, and reduce the federal government's exposure to flood loss over time."  

MBA also expressed support for H.R. 4620, the Preserving Access to CRE Capital Act (https://www.congress.gov/search?q={"source":"legislation","congress":"114","search":"HR+4620"}), which addresses MBA concerns with regulatory implementation of the Dodd-Frank Act's risk retention rules.  

"Those rules are going to fundamentally impact the commercial mortgage backed securities market, which currently holds more than $500 billion in commercial real estate loans," Killmer wrote. "As finalized, we believe they could hamper the CMBS market by too narrowly defining the commercial real estate loans that qualify for a risk retention exemption. Passage of this legislation will keep the new regulatory regime from having a chilling effect on the commercial real estate finance industry, as well as the overall economy."  

MBA NewsLink and MBA Commercial/Multifamily NewsLink will provide coverage of the hearing.  

Additionally, the Mortgage Action Alliance, MBA's grassroots advocacy arm, sent several Call-to-Action requests to its members, encouraging them to write their legislators in support of H.R. 2121. For more information, click http://www.mortgagebankers.org/Advocacy/MortgageActionAlliance.

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