MBA Advocacy Update

Steve O'Connor; Bill Killmer  

April 15, 2019

This past week, Treasury Secretary Steven Mnuchin testified before both the House Financial Services Committee and the House Appropriations Subcommittee on Financial Services and General Government regarding a broad slate of economic items and the Treasury Department's FY 2020 budget request, respectively.  

In the Senate, Cheryl Stanton was confirmed as Administrator of the Labor Department's Wage and Hour Division. Congress will now leave for its traditional two-week Passover/Easter/Spring recess.  

Bicameral Progress on IRS Modernization
On Tuesday, the House passed H.R. 1957, the Taxpayer First Act of 2019, by voice vote.  

H.R. 1957 and its Senate companion, S. 928, introduced by Sens. Charles Grassley, R-Iowa, and Ron Wyden, D-Ore., represent the first legislative reform to the Internal Revenue Service in nearly two decades.   Among its 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, 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  

Financial Services Subcommittee Discusses Community Reinvestment Act
On Apr. 9, the House Financial Services subcommittee on Consumer Protection and Financial Institutions held a hearing on The Community Reinvestment Act: Assessing the Law's Impact on Discrimination and Redlining. Witnesses included advocacy groups, academics and a reporter.  

During the hearing, Subcommittee Chairman Greg Meeks, D-N.Y., advocated for elimination of "loopholes" in CRA, specifically in three areas: (1) instances where CRA credit is provided on loans in low- and moderate-income assessment areas even when those loans are not to LMI borrowers; (2) 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 Ranking Member Patrick McHenry, R-N.C., 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  

Treasury Secretary Mnuchin Testifies Before House Financial Services Committee
On Apr. 9, the House Financial Services Committee heard from Treasury Secretary Steven Mnuchin at a sometimes-spirited hearing, 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 and implementation of Financial Accounting Standards Board's Current Expected Capital Loss 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. 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 Fed, FHFA, Other Independent Agencies
On Apr. 11 the Office of Management and Budget, an agency in the Executive Office of the President, released a memo instructing the independent government agencies such as Consumer Financial Protection Agency, the Federal Housing Finance Agency, the Fed and others on the need to provide for congressional review under the Congressional Review Act of nearly 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 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.  

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 Proposal
On Apr. 8, MBA submitted comments on the proposed Community Bank Leverage Ratio framework issued by the OCC, Fed and FDIC 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 Act of 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 to require statutory trusts to become licensed debt collection agencies was ultimately defeated when the Maryland legislature adjourned last Monday. 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 and House of Delegates, in-person meetings with legislators on key committees, as well as several Mortgage Action Alliance Calls to Action.  

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

Remote Online Notarization Campaign Continues: Maryland Legislature Passes RON Bill
Last week, following unanimous approval by the Maryland Senate, the state's House approved SB 678 to permit remote online notarizations in the state. If signed by Gov. Larry Hogan (R), 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 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.  

For more information about the RON legislative campaign, visit the MBA RON Resource Center (  or contact William Kooper at (202) 557-2737; or Kobie Pruitt at (202) 557-2870

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