MBA State Relations Committee Update Federal Highlights

Advocacy News and Information from the Latest Issue of the MBA State Relations Committee Update

Senate Introduces GUIDE Act Companion 
Senators Orrin Hatch (R-UT) and James Lankford (R-OK) introduced the GUIDE Compliance Act (S. 3443), which would provide a statutory framework requiring the Bureau of Consumer Financial Protection ("BCFP") to issue regular, written interpretative rules and guidance to facilitate industry compliance - and thereby better protect consumers and provide needed clarity with respect to the issuance of both rules and guidance by the BCFP.  The House companion bill (H.R. 5534), introduced by Reps. Sean Duffy (R-WI) and Ed Perlmutter (D-CO), was passed by the House Financial Services Committee by a margin of 38-14 last Thursday. 

MBA Meets with the Treasury on Pass-through Deduction (Section 199A) Guidance
On September 20th, MBA met with officials from the Treasury and IRS to discuss guidance on pass-through deductions. Both agencies have previously released proposed regulations on the new 20 percent pass-through deduction under section 199A of the tax code. The meeting this week was an opportunity to get additional clarification and advocate that members of our industry should be entitled to take advantage of the new 20 percent deduction against ordinary business income. MBA has sent letters to both the Treasury and the IRS regarding this issue, and we intend to do so in the near term to follow-up on this week's important exchange.

MBA Resource Center for Disaster Recovery
With Hurricane Florence battering the Carolinas, MBA updated our Disaster Recovery Resource Center for homeowners. This includes a resource paper that outlines what to do before and after the disaster along with how to start, and then, work through the recovery process. MBA members are able to download a copy of the resource paper that allows them to add their own branding to the front cover. Download a copy from the Resources from Residential Policy Committees and Networks section in the Residential Member Portal. A Spanish language version of the guide is also available. 

House Financial Services Committee Advances Legislation on Bureau Guidance, VA Loan Securitization
The House Financial Services Committee held a markup on a series of thirteen bills. MBA sent a letter of support for two specific measures, one focused on guidance at the Bureau of Consumer Financial Protection (BCFP) and another which addressed a Ginnie Mae securitization issue for a series of VA-guaranteed loans. MBA strongly supports H.R. 5534, the Give Useful Information to Define Effective Compliance Act or "GUIDE" Compliance Act. This bipartisan legislation, which was conceptualized via an MBA RESBOG task force and introduced on a bipartisan basis by Representatives Sean Duffy (R-WI) and Ed Perlmutter (D-CO), would provide a statutory framework requiring the BCFP to issue regular, written interpretative rules and guidance to facilitate industry compliance - and thereby better protect consumers. The bill was passed by a vote of 38-14. MBA also offered strong support for H.R. 6737, the Protect Affordable Mortgages for Veterans Act, introduced on a bipartisan basis by Representatives Lee Zeldin (R-NY), Claudia Tenney (R-NY), and Kyrsten Sinema (D-AZ). This legislation addresses an unintended consequence from the enactment of Section 309 of S.2155, entitled "Protecting Veterans from Predatory Lending," where approximately 2,500 VA-guaranteed loans that were deemed ineligible for Ginnie Mae pooling were "orphaned" and cannot be securitized. The bill was lauded by members on both sides of the aisle and passed by a unanimous 49-0 vote.           

MBA Submits Comments to USDA on Technology Fee Proposal
MBA submitted a comment letter to the United States Department of Agriculture (USDA) on the notice to implement a technology fee. This technology fee will be collected on all closed loans from lenders who are utilizing USDA's Rural Housing Services' (RHS) automated guaranteed loan systems. MBA supports upgrading RHS's systems, as they are outdated and in need of critical enhancements. The collection of the fee will enable USDA to fund these future information technology enhancements to improve program delivery for both consumers and lenders. To ensure the appropriate implementation of a fee and the efficient use of the funds collected, MBA offered technical recommendations related to operational issues, disclosures, and oversight.

FHFA Issues Proposed Rule on Uniform Mortgage-Backed Security
FHFA released a proposal to further facilitate development of the Uniform Mortgage-Backed Security (UMBS). As context, the GSEs are in the final stages of their multi-year preparations for the adoption of the UMBS. The UMBS, or "Single Security," will replace the separately-traded Fannie Mae and Freddie Mac securities and will be issued through the Common Securitization Platform (CSP). Issuance of the UMBS is slated to begin on June 3, 2019. The proposed rule is designed to align the programs, policies and practices that affect prepayment rates of both the current securities offerings and the UMBS. Limiting disparities in prepayment rates remains one of the critical determinants of a well-functioning UMBS market. MBA has consistently supported the development of the CSP and the UMBS, with the expectation that issuance of the UMBS should improve secondary market liquidity and lead to a stronger, healthier primary market. FHFA has also posted a Single Security timeline and a Market Adoption Playbook, which provide additional details for market participants.

Regulators Issue Interagency Statement Clarifying Supervisory Guidance
The Bureau of Consumer Financial Protection (BCFP), Board of Governors of the Federal Reserve System (Fed), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) released an interagency statement clarifying in writing the role of supervisory guidance. The statement explains the role of supervisory guidance and describes the agencies' collective approach to supervisory guidance. Notably, the statement highlights that "[u]nlike a law or regulation, supervisory guidance does not have the force and effect of law, and that agencies do not take enforcement actions based on supervisory guidance." Supervisory guidance includes "interagency statements, advisories, bulletins, policy statements, questions and answers, and frequently asked questions, to their respective supervised institutions."