MBA Advocacy Update

Steve O'Connor soconnor@mba.org; Bill Killmer bkillmer@mba.org  

April 08, 2019

MBA's National Advocacy Conference took place in Washington last week, giving attendees a chance to petition their elected officials and hear from a large cast of speakers, including a bipartisan mix of key congressional leaders on financial services and housing issues.  

On Thursday the Senate confirmed Mark Calabria to be the next Director of the Federal Housing Finance Agency. Also last week, the House Financial Services Committee held hearings on a range of topics including affordable housing and the Fair Housing Act.  

More than 400 industry advocates from 40 states attended the Advocacy. The conference program included a slate of congressional and administration speakers including HUD Secretary Ben Carson, Senate Banking Committee member Doug Jones, D-Ala., key House Financial Services Committee member and subcommittee chair Greg Meeks, D-N.Y., "Problem Solvers" Caucus members Reps. Josh Gottheimer, D-N.J., and Steve Watkins, R-Kan., and Fox News Anchor Chris Wallace, in addition to a memorable reception with elected officials in the Great Hall of the Library of Congress.  

On Wednesday, 300 attendees participated in 272 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 Senate Banking Committee and Senate Finance Committee member Tim Scott, R-S.C., House Financial Services Committee member Brad Sherman, D-Calif., along with key staff from the office of House Speaker Nancy Pelosi, D-Calif., the Senate Banking Committee, Senate Appropriations Committee and the Senate Health, Education, Labor and Pensions Committee.  

For more information please contact Bill Killmer at (202) 557-2746 bkillmer@mba.org; or Alden Knowlton at (202) 557-2816 aknowlton@mba.org.  

Senate Confirms Calabria to Lead FHFA

On Thursday, the Senate confirmed Mark Calabria to serve as Director of the Federal Housing Finance Agency. MBA President and CEO Bob Broeksmit, CMB, released a statement (https://www.mba.org/2019-press-releases/april/statement-of-bob-broeksmit-on-confirmation-of-mark-calabria-to-be-director-of-the-fhfa) congratulating Calabria 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.  

Last week, MBA joined other industry trade groups in a letter urging the Senate to approve Calabria's nomination. This followed a previous letter MBA 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 ebarry@mba.org; or Tallman Johnson at (202) 557-2866 tjohnson@mba.org.  

Legislation Introduced to Address 'Orphaned' VA Loans

Last week, a bipartisan group of congressmen led by David Scott, D-Ga., Lee Zeldin, R-N.Y., Mike Levin, D-Calif., 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 during the 115th Congress.  

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 nearly 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 dgrattan@mba.org; or Bill Killmer at (202) 557-2736 bkillmer@mba.org.  

FHFA Directs GSEs to Disburse Affordable Housing Funds

Last week, the Federal Housing Finance Agency announced it authorized Fannie Mae and Freddie Mac to release more than $376 million to the Housing Trust Fund operated by HUD and the Capital Magnet Fund operated by the Treasury Department (https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Authorizes-Payments-to-Housing-Trust-Fund-and-Capital-Magnet-Fund.aspx).  

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 dfichtler@mba.org.  

House Financial Services Committee Focuses on the Fair Housing Act

On Tuesday, the House Financial Services Committee 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-Calif., 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 the Restoring 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 at https://financialservices.house.gov/uploadedfiles/hhrg-116-ba00-20190402-sd002_-_memo.pdf.  

For more information, please contact Dan Grattan at (202) 557-2712 dgrattan@mba.org; or Bill Killmer at (202) 557-2736 bkillmer@mba.org.  

Legislation Approved to Combat Illegal Robocalls Heads to Senate

On Wednesday, the Senate Commerce Committee approved S. 151, the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act, by voice vote. Introduced by Sens. John Thune, R-S.D., and Ed Markey, D-Mass., this bipartisan bill would amend the Telephone Consumer Protection Act 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. Thune offered a substitute amendment for the measure during the committee markup, and Sen. Jerry Moran, R-Kan., 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 tjohnson@mba.org; or Bill Killmer at (202) 557-2736 bkillmer@mba.org.  

FASB Rejects Recommendation to Tweak CECL

On Wednesday, the Financial Accounting Standards Board voted to reject a recommendation by a coalition of midsized banks to tweak some sections of Current Expected Credit Losses 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 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: https://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1351027222464.  

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

Regulators Issue Additional FAQs and Answers on CECL

On 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 released a set of FAQs and answers on CECL implementation.  

The document (https://www.fdic.gov/news/news/financial/2019/fil19020.pdf) 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 fmordi@mba.org.  

MBANow Discusses MLO Temporary Authority; Conference of State Bank Supervisors to Address Implementation at MBA Legal Issues Conference

In an MBANow video interview released last week (https://www.mba.org/get-involved/stay-connected/mba-video-main-page/mba-now), MBA staff discuss implementation of mortgage loan originator Temporary Authority and the steps companies should be taking to prepare ahead of November 24, 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 www.NMLS.org; and as a starting point all MLOs and state-licensed companies should review them.  

MBA will also host staff from the Conference of State Bank Supervisors at the upcoming MBA Legal Issues and Regulatory Compliance Conference (https://www.mba.org/conferences-and-education/event-mini-sites/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 hold webinars with CSBS that will be announced soon.  

For more information, please contact William Kooper at (202) 557-2737 wkooper@mba.org; or Kobie Pruitt at (202) 557-2870 kpruitt@mba.org.  

Remote Online Notarization Progress Continues as Arizona Legislature Sends Bill to Governor

Last week, following unanimous approval by the Arizona Senate in February, the state's House gave SB-1030 its unanimous approval. If signed by Governor Doug Ducey (R), the bill would authorize remote online notarization 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, 16 states will 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 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 (https://www.mba.org/audience/state-legislative-and-regulatory-resource-center/remote-online-notarization)  or contact William Kooper at (202) 557-2737 wkooper@mba.org; or Kobie Pruitt at (202) 557-2870 kpruitt@mba.org.  

MBA Education Webinar on UMBS Readiness and Best Practices Apr. 10

Join MBA Education and subject matter experts on April 10 for a look at UMBS readiness. 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 marketplace. Attendees will also develop an understanding of how the UMBS impacts sellers (mortgage bankers, originators and aggregators) as well as origination, servicing, and your hedging processes.  

To register for this webinar, click https://www.mba.org/store/events/webinar/umbs-and-your-business-best-practices-for-readiness.  

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

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