MBA Advocacy Update

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

March 11, 2019

Consumer Financial Protection Bureau Director Kathy Kraninger testified before the House Financial Services Committee last week for a semi-annual review of the Bureau's ongoing efforts.  

The MBA National Advocacy Conference takes place in Washington, D.C., April 2-3. HUD Secretary Ben Carson and Senate Banking Committee Member Doug Jones, D-Ala., will be featured speakers.  

House Committee Turns Focus to CFPB
On Mar. 7, the House Financial Services Committee held a lengthy two-panel hearing on Putting Consumers First? A Semi-Annual Review of the Consumer Financial Protection Bureau. CFPB Director Kathy Kraninger was the only witness on the initial panel. Later in the day, the Committee heard from executives from the NAACP, the National Military Family Association and the Student Borrower Protection Center, among others. A broad range of topics were covered, including so-called payday lending, student lending, the Military Lending Act, TRID, PACE Loans, UDAAP and innovation in fintech. A summary of the hearings can be found at http://mba-pc.informz.net/mba-pc/data/images/AdvocacyDocuments/3-7%20HFSC%20hearing%20on%20CFPB.pdf.  

The day before the hearing, nearly 30 House Democrats introduced a discussion draft of legislation seeking to undo actions taken at the agency by former Acting Director Mick Mulvaney. The Consumers First Act would limit the number of political appointees the CFPB can hire, restore supervision and enforcement authority in the agency's fair-lending office and resume supervision for the Military Lending Act, among other provisions. The text of the legislation can be found at https://financialservices.house.gov/uploadedfiles/bills-116pih-consumersfirst.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.  

MBA National Advocacy Conference Apr. 2-3
This year's MBA National Advocacy Conference will take place April 2-3 at the Capital Hilton in Washington, D.C. (https://www.mba.org/conferences-and-education/event-mini-sites/national-advocacy-conference-x241593).  

The NAC is an annual tradition that enables MBA members to speak directly to their elected officials as advocates for our industry. Speakers at NAC will include HUD Secretary Ben Carson, Senate Banking Committee Member Doug Jones, D-Ala., and Fox News anchor Chris Wallace, in addition to a memorable reception with elected officials in the Great Hall at the Library of Congress. Register today to be a part of our industry's largest advocacy event of the year (https://www.mba.org/conferences-and-education/event-mini-sites/national-advocacy-conference/pricing-x241605?utm_source=Informz&utm_medium=Email&utm_campaign=mba%2Eorg&_zs=mB8cN1&_zl=EItt4).  

For more information, please contact Alden Knowlton at (202) 557-2816 aknowlton@mba.org.  

Uniform MBS Approved for the TBA Market
The Securities Industry and Financial Markets Association's To-Be-Announced Guidelines Advisory Council voted last week to approve the Uniform MBS for "good delivery" in the TBA market. This vote represents a critical step forward for the transition to a "single security" in the fixed-rate, single-family conventional market (https://www.sifma.org/wp-content/uploads/2017/06/2019-03-05-TBAGAC_Decision-Summary.pdf).  

Following the SIFMA vote, Uniform MBS (and Uniform MBS re-securitizations, known as "Supers") will be good delivery for the TBA market, effective for trades on or after March 12, with settlement dates on or after June 3. Fannie Mae securities that were good delivery for a Fannie Mae TBA prior to June 3 will be good delivery for a Uniform MBS TBA beginning on June 3. Freddie Mac securities will need to be exchanged for Uniform MBS to serve as good delivery, and Freddie Mac is offering an exchange platform to facilitate this transition.  

As a reminder, issuance of the Uniform MBS is expected to begin on June 3. MBA hosted a webinar in December to help prepare members for the transition (https://www.mba.org/store/products/webinar-recordings-and-packages/single-security-initiative-what-lenders-need-to-know-x248134).  

For more information, please visit the FHFA Single Security Initiative resources or contact Dan Fichtler at (202) 557-2780 dfichtler@mba.org.  

Ginnie Mae Announces Minimum Portfolio Servicing Spread Requirements
In an All Participant Memorandum released last week (https://www.ginniemae.gov/issuers/program_guidelines/Pages/mbsguideapmslibdisppage.aspx?ParamID=96), Ginnie Mae published a new requirement that single-family issuers maintain a weighted average servicing spread of at least 25 basis points. This requirement is based on the issuer's forward, fixed-rate, single-family loans and applies at the portfolio level rather than to specific pools.  

The minimum servicing spread requirement takes effect on March 1, 2020. Issuers that are not compliant by this date may face additional requirements, such as restrictions on pools with servicing spreads of less than 25 basis points.  

This APM represents another step in Ginnie Mae's ongoing recalibration of its counterparty risk management practices. MBA remains actively engaged with Ginnie Mae as it pursues new policies and requirements during this process.  

For more information, please contact Dan Fichtler at (202) 557-2780 dfichtler@mba.org.  

MAA Call to Action on Self-Employed Mortgage Access Act 
Last week, the Mortgage Action Alliance issued a Call to Action (https://action.mba.org/app/write-a-letter?0&engagementId=497277) asking members to contact their senators and urge them to cosponsor S. 540, the Self-Employed Mortgage Access Act, reintroduced last week by Sens. Mark Warner, D-Va., and Mike Rounds, R-S.D. S. 540 addresses challenges presented in documenting the ability to repay for borrowers with non-traditional forms of income (https://www.warner.senate.gov/public/index.cfm/pressreleases?id=6A1A5F0F-D1D7-420A-B700-056C768DF750).  

Discussions continue regarding introduction of companion bipartisan legislation in the House. The legislation includes recommendations made by MBA to the Consumer Financial Protection Bureau and would allow use of existing underwriting standards such as those found in the Fannie Mae and Freddie Mac Seller/Servicer Guides or the FHA, VA and USDA Handbooks as alternatives to Appendix Q. 

For more information, please contact Erin Barry at (202) 557-2913 ebarry@mba.org; Dan Grattan at (202) 557-2712 dgrattan@mba.org;  or Alden Knowlton at (202) 557-2816 aknowlton@mba.org.  

MBA Joins Other Trade Groups on CECL Implementation Delay Advocacy
On Mar. 5, MBA and other trade associations sent a letter to the Financial Accounting Standards Board and the Securities and Exchange Commission requesting a delay in CECL implementation and a much-needed qualitative impact study. The letter, which reiterates most of the facts, analysis and details contained in a letter MBA sent to the Financial Stability and Oversight Committee in November, recognized efforts that FASB has made to stay engaged with the industry on CECL--including putting together a roundtable discussion for stakeholders on January 28 to discuss the potential impact of CECL.  

The letter noted the importance of FASB maintaining its engagement with industry and "taking into account both operational considerations and assessing the availability of decision-useful information for all sizes and types of institutions." The letter recognized the importance of the SEC as the regulatory body overseeing FASB, and in that role, the trade groups hope, it will take on the obligation to provide the resources needed for FASB to conduct the necessary risk review and economic analysis of CECL implementation.  

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

CFPB Issues ANPR to Solicit Information and Consider ATR Requirements on PACE Financing
Last week, the Consumer Financial Protection Bureau issued an Advance Notice of Proposed Rulemaking on residential Property Assessed Clean Energy financing (https://files.consumerfinance.gov/f/documents/cfpb_anpr_residential-property-assessed-clean-energy-financing.pdf).  

Section 307 of last year's Economic Growth, Regulatory Relief and Consumer Protection Act amended the Truth in Lending Act to mandate that the Bureau prescribe ability to repay regulations relating to PACE financing. The Bureau is expected to prescribe regulations that account for the unique nature of PACE financing and carry out the purposes of TILA's existing ATR requirements while also applying TILA's general civil liability provision for violations of the ATR rules.  

For more information, please contact Justin Wiseman at (202) 557-2854 jwiseman@mba.org; Blake Chavis at (202) 557-2930 bchavis@mba.org; or Sheraz Syed at (202) 557-2941 ssyed@mba.org.  

FTC Seeks Comment on Proposed Changes to Data Privacy, Data Security Rules
Last week, the Federal Trade Commission issued a press release indicating it would seek comment on "proposed amendments to two rules that protect privacy and security of customer information held by financial institutions" (https://www.ftc.gov/news-events/press-releases/2019/03/ftc-seeks-comment-proposed-amendments-safeguards-privacy-rules).  

Specifically, the FTC will address the Privacy Rule and the Safeguards Rule, the latter of which requires financial institutions to "develop, implement and maintain a comprehensive information security program." The Privacy Rule requires financial institutions to provide consumers with a privacy policy disclosure and the opportunity to opt out of having their information shared with unaffiliated third parties. While the lion's share of authority over the Privacy Rule has been granted to the CFPB, the Safeguards Rule remains in effect under the FTC's jurisdiction. The amendments are expected to include more detailed requirements for information security programs, encryption of all customer data, access controls to avoid unauthorized access to consumer information, and multifactor authentication for accessing consumer information.  

For more information, please contact Rick Hill at (202) 557-2718 rhill@mba.org; Justin Wiseman at (202) 557-2854 jwiseman@mba.org; or Sheraz Syed at (202) 557-2941 ssyed@mba.org.  

States Continue to Move Forward on Remote Online Notarization Legislation; MBA Initiates a RON 'Call to Action' in Colorado
Last week, legislation was passed in North Dakota (HB 1110 https://www.legis.nd.gov/assembly/66-2019/documents/19-0254-04000.pdf) and South Dakota (HB 1272 https://sdlegislature.gov/Legislative_Session/Bills/Bill.aspx?File=HB1272HJU.htm&Session=2019&Version=House%20Judiciary&Bill=1272) that would, if signed by their respective governors, allow these states to join Ohio, Michigan, Minnesota, Tennessee, Indiana, Virginia, Montana, Texas, Nevada and Vermont in permitting remote online notarization.  

North Dakota and South Dakota become the second and third states, respectively, to pass RON legislation in 2019. Utah (HB 52 https://le.utah.gov/~2019/bills/static/HB0052.html) was the first state to pass legislation this year; however, the bill remains unsigned by the governor. The language of all three bills is consistent with the industry standard set by the MBA-ALTA model bill and the Uniform Law Commission's Revised Uniform Law on Notarial Acts. In addition, MBA recently collaborated with the Colorado MLA to initiate a "Call to Action" in Colorado encouraging the passage of RON legislation (HB19-1167 https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_1167_01.pdf).    

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 California Consumer Privacy Act Mar. 13
Join MBA Compliance Essentials and the California Mortgage Bankers Association on March 13, as subject matter experts discuss the new California Consumer Privacy Act and how it will impact lenders in California.  

While the CCPA is scheduled to go into effect in 2020, there are a number of tasks that every company needs to start doing right now. The CCPA is about giving California residents--including employees, vendors and even visitors to your web site--more control over data that you have collected about them.  

To register for this webinar, click https://www.mba.org/store/events/webinar/ce-california-consumer-privacy-act-what-you-need-to-know.  

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

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