MBA Advocacy Update
Last week, the Senate Banking Committee voted to advance the nomination of Mark Calabria as director of the Federal Housing Finance Agency. MBA President and CEO Bob Broeksmit released a congratulatory statement and called on the full Senate to confirm him.
MBA and 27 other organizations sent a letter to FHFA Acting Director Joseph Otting on priorities for preserving access and affordability when undertaking administrative reforms to the GSEs. And Federal Reserve Chairman Jerome Powell addressed both the House and Senate, answering questions on both GSE reform and the Current Expected Credit Losses accounting standard.
Broad Coalition Urges Policymakers to Prioritize Market Stability in Administrative GSE Reform Efforts
On Friday, MBA was joined by 27 organizations, representing a broad cross-section of consumer and industry organizations, in a letter to Federal Housing Finance Agency Acting Director Joseph Otting on priorities for preserving access and affordability when undertaking administrative reforms to Fannie Mae and Freddie Mac.
Specifically, the coalition advised that GSE reform must seek to further two key objectives: 1) preserving what works in the current system, while 2) maintaining stability by avoiding unintended adverse consequences for borrowers, lenders, investors or taxpayers.
The coalition also noted "comprehensive legislative reform...is ultimately necessary in order to codify structural changes that ensure safety and soundness and provide the certainty needed for private capital to establish a more reliable presence in housing finance." MBA continues to call on Congress to institute comprehensive reforms to address the structural problems in the GSE charters and business models that contributed to the financial crisis a decade ago (https://www.mba.org/issues/gse-reform).
For more information, please contact Dan Fichtler at (202) 557-2780 firstname.lastname@example.org.
Senate Banking Committee Advances Calabria as Head of FHFA
On Feb. 26, the Senate Banking Committee voted to advance the nomination of Mark Calabria as director of the Federal Housing Finance Agency. The vote passed along party lines, 13-12. MBA President and CEO Bob Broeksmit sent a letter of support and called on the Senate to confirm Calabria when his nomination heads to the Senate floor in the coming weeks (https://www.mba.org/2019-press-releases/february/statement-of-bob-broeksmit-on-committee-approval-of-mark-calabrias-nomination-to-be-director-of-the-federal-housing-finance-agency).
Also on Tuesday, the Senate panel approved nine other nominations by President Donald Trump, including Bimal Patel as Assistant Secretary for Financial Institutions at Treasury, Todd Harper and Rodney Hood as members of the National Credit Union Administration Board, Dino Falaschetti as Director of Treasury's Office of Financial Research and HUD Assistant Secretary nominees Seth Appleton (Policy, Development and Research) and Hunter Kurtz (Public and Indian Housing).
FHFA Finalizes Rule to Align GSE MBS Cash Flows Ahead of Single Security Launch
Last week, the Federal Housing Finance Agency finalized a rule (https://www.fhfa.gov/SupervisionRegulation/Rules/RuleDocuments/UMBS%20Final%20Rule%20for%20Web.pdf) to better align cash flows of certain Fannie Mae and Freddie Mac single-family securities. This alignment process is being undertaken to support implementation of the Single Security Initiative (https://www.fhfa.gov/PolicyProgramsResearch/Policy/Pages/Securitization-Infrastructure.aspx).
In November, MBA submitted comments on the FHFA proposal, noting that "development of the [Uniform MBS] and the Common Securitization Platform...will represent a vastly improved single-family secondary mortgage market infrastructure." MBA recommendations around alignment monitoring, corrective actions in response to misalignment and transparency in setting alignment thresholds were incorporated into the final rule.
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 contact Dan Fichtler at (202) 557-2780 email@example.com.
Fed Chairman Powell Addresses GSE Reform, CECL
Federal Reserve Chairman Jerome Powell addressed both the House and Senate last week and answered questions on GSE reform and Current Expected Credit Losses accounting standard.
During Powell's hearing in the Senate, Banking Committee Chairman Mike Crapo, R-Idaho, noted his committee will be aggressively trying to put together a bipartisan solution to address GSE reform. Powell stated that it is one of the biggest pieces of unfinished business in the post-crisis reform era and offered that recent proposals have the right elements to ensure that significant private capital stands in front of taxpayers. Powell pledged to work with the committee in its effort, offering the services of the Fed's staffers with housing expertise. In the House, Financial Services Committee Ranking Member Patrick McHenry, R-N.C., raised the importance of GSE reform, to which Powell suggested that it should be a priority for Congress.
Also in the House, Rep. Brad Sherman, D-Calif., called CECL an "esoteric accounting theory discussion gone awry." He asked Powell if he thinks a quantitative impact study is required to understand whether CECL implementation will limit lending, especially in economic downturns. Powell said they will implement CECL and that there was no such study required, though he said they will be watching closely thereafter and will take appropriate action if needed.
Warner, Rounds Reintroduce Self-Employed Mortgage Access Act
Last week, Sens. Mark Warner, D-Va., and Mike Rounds, R-S.D., reintroduced the Self-Employed Mortgage Access Act, which 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). Sen. Cory Booker, D-N.J., joined as an original cosponsor.
The legislation, which embodies recommendations made by MBA to the Consumer Financial Protection Bureau, 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. These existing standards could be used to satisfy the requirements needed for a loan to achieve Qualified Mortgage status.
Consumer Data Privacy Hearings in House, Senate
On Tuesday, the House Energy and Commerce Committee's Subcommittee on Consumer Protection and Commerce held a hearing, Protecting Consumer Privacy in the Era of Big Data. The following day the Senate Commerce Committee held a hearing, Policy Principles for a Federal Data Privacy Framework in the United States.
The hearings restarted the congressional conversations and followed similar themes regarding consumer data collection and privacy. Members from both sides of the aisle in the House and Senate agreed that a federal standard is necessary. However, the Senate Commerce Committee Ranking Member, Sen. Maria Cantwell, D-Wash., stressed the importance of a strong federal standard that does not weaken state efforts to protect consumers.
While the European Union's General Data Protection Regulation and the California data privacy model are examples of consumer data protection standards, neither committee elevated those models as the starting point for a federal data standard. Consumer data protection requires additional monitoring given the bipartisan, bicameral interest in a federal standard.
House Panel on Diversity and Inclusion Holds First Hearing
On Wednesday, the newly formed Diversity and Inclusion Subcommittee of the House Financial Services Committee held a hearing, An Overview of Diversity Trends in the Financial Services Industry. The hearing had one witness, Daniel Garcia-Diaz, Director of Financial Markets and Community Investment with the Government Accountability Office.
The hearing largely discussed the findings in the GAO report: Financial Services Industry: Trends in Management Representation of Minorities and Women and Diversity Practices, 2007-2015. The report was in response to a request by Chairwoman Maxine Waters, D-Calif., along with Sen. Sherrod Brown, D-Ohio, and Rep. Al Green, D-Texas. Garcia-Diaz said research shows there is still a shortage of women and minorities in leadership roles in the financial services industry. He also highlighted that the GAO study found the banking sector had the greatest representation of minorities in overall management, whereas the insurance industry had the highest proportion of women in overall management.
Industry Coalition Opposes Flawed New Mexico Remote Online Notarization Bill
Last week, in a letter drafted by MBA, an industry coalition weighed in on the flaws of proposed legislation (HB-470 https://www.nmlegis.gov/Sessions/19%20Regular/bills/house/HB0470.pdf) in New Mexico to allow remote online notarization. Joining MBA on the letter were the American Land Title Association, the New Mexico Mortgage Lenders Association, and the New Mexico Land Title Association.
The letter pointed out that while well intentioned, the legislation does not adhere to the industry's core principles for state RON laws, which include: the need for robust provisions for ID proofing and credential analysis; that acknowledgements performed online can be readily identified and distinguished from those done in person; that technology requirements should not be so specific as to favor one vendor over another; and that legislation should conform to other legal standards and laws. These principles are at the core of the MBA-ALTA model RON state law and have been embraced in the adopted laws and proposed legislation of several states. They were also embraced by the non-partisan Uniform Law Commission in its update to the Revised Uniform Law on Notarial Acts to include RON, which was released earlier this year.
For more information about the RON legislative campaign, please 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 firstname.lastname@example.org; or Kobie Pruitt at (202) 557-2870 email@example.com.
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 firstname.lastname@example.org.