MBA State Relations Committee Update Federal Highlights

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

House to Consider Senate Regulatory Relief Package

House Speaker Paul Ryan (R-WI) said this week the House will take up S. 2155, the community lender reg relief package which passed the Senate by a filibuster-proof sixty-seven votes in March - as currently written and free from amendment. S. 2155 contains a number of MBA-supported provisions, such as:

•         SAFE Act amendments to provide 120 days of transitional authority for MLOs to originate when leaving a depository to join a sponsoring non-bank (or when crossing state lines);

•         applying TILA consumer protections to PACE/energy efficiency mortgage products;

•         added safeguards to protect veterans, surviving spouses and service members who utilize the VA Home Loan program's IRRRL refinancing product;

•         an improved, more workable regulatory regime for the eligibility of High Volatility Commercial Real Estate (HVCRE) construction loans; and,

•         partial TRID and HMDA relief.       

Though Speaker Ryan stopped short of giving a specific timeline for the vote, there is informed speculation the full House could vote on the bill prior to Memorial Day. The Senate is also expected to consider a package of additional bipartisan capital formation bills that have passed the full House at a later date - this after discussions and an agreement that was forged with House Financial Services Committee Chairman Jeb Hensarling (R-TX). Senate Banking Committee Chairman Mike Crapo (R-ID) is said to be considering the appropriate way to re-engage with moderate Banking Committee Democrats Mark Warner (D-VA), Heidi Heitkamp (D-ND), Joe Donnelly (D-IN), and Jon Tester (D-MT) to test the feasibility moving the remaining House-passed bills.      

Sign Up for the Third Annual MAA Action Week

The Mortgage Action Alliance (MAA), MBA's free nationwide grassroots lobbying network will be holding its third annual Action Week next week from May 14 - 18. This is a week-long event dedicated to helping real estate finance professionals become more engaged in political advocacy. MBA Chairman-Elect Chris George recently filmed a video outlining why it's important for industry leaders to participate. Last year, 63 companies participated, enrolling 4,500 new MAA members and resulting in over 1,300 MAA App downloads. This year, our goals are to surpass 30,000 MAA members and exceed 5,000 downloads of the MAA App. So far, 53 companies and 18 state mortgage banking associations have signed up. Click here to sign up and participate in this national, industry-wide campaign. For more information please contact Alden Knowlton at (202) 557-2816.   

MBA Submits Comment Letter on BCFP's RFI on Bureau Rules of Practice for Adjudication Proceedings

MBA's comment letter communicated many of the industry's concerns with the administrative adjudication process. In addition to offering comments related to the adjudication process, MBA reiterated its support for a broad reexamination of Bureau practices as detailed in MBA's CFPB 2.0: Advancing Consumer Protection white paper. Fairness in the administrative adjudication process is crucial to the Bureau's ability to successfully achieve its statutory purposes. The rules governing BCFP adjudications were designed to ensure that these non-judicial proceedings are conducted fairly and expeditiously. While the current adjudication process facilitates a speedy resolution, it does so at the expense of due process protections in a proceeding where fairness must be the primary objective. MBA urged the Bureau to adopt three broad recommendations:

•         provide respondents with the option of a judicial forum by adopting a removal mechanism;

•         improve the administrative adjudication process for respondents who prefer an administrative proceeding; and

•         allow contested matters should be brought in federal court until the Bureau can implement these changes.      

MBA Joins U.S. Chamber of Commerce's Petition for Declaratory Ruling to Clarify TCPA Definition of ATDS

Last week, the United States Chamber of Commerce (Chamber) filed its petition with the Federal Communication Commission (FCC), in light of the D.C. Circuit's decision in ACA International v. FCC where the FCC's classification of an automated telephone dialing system (ATDS) was characterized as "an unreasonably expansive interpretation of the [TCPA]." In its petition, the Chamber, MBA, and other petitioners, ask that the FCC first "confirm that to be an ATDS, equipment must use a random or sequential number generator to store or produce numbers and dial those numbers without human intervention," and second "find that only calls made using actual ATDS capabilities are subject to the TCPA's restrictions." The petition notes that the TCPA was originally intended to "target a specific abusive telemarketing practice," but has turned into a "breeding ground for frivolous lawsuits against legitimate businesses trying to communicate with their customers," the results of which have led to exponential growth of litigation harming large and small businesses with no clear benefit to consumers. Recent regulatory efforts by the FCC only proved more problematic, with the 2015 Omnibus Order distorting the TCPA's plain meaning and expanding the definition of ATDS to potentially include mobile devices. Recognizing these serious flaws, the D.C. Circuit's decision provided a "logical roadmap for how the Commission should interpret ATDS," a roadmap which the Chamber and the MBA draw out clearly in the petition.      

HUD to Seek Comment on Disparate Impact Rule

HUD announced its intention to seek formal public comment on its 2013 Discriminatory Effects (Disparate Impact) Rule. This rule was finalized prior to the 2015 Supreme Court decision that codified the disparate impact standard with respect to claims under the Fair Housing Act. That decision also outlined how to prove disparate impact under that statute. Since that decision, MBA has asked HUD to revisit the 2013 Disparate Impact rule to address inconsistencies between the standards in the rule and the subsequent decision. MBA has urged HUD to align these standards since the Supreme Court decision was issued, and applauds HUD for beginning that process.

MBA Submits Comment Letter on CFPB's RFI on Civil Investigative Demands

MBA's comments letter communicated many of the industry's concerns with the CID process and reiterated support for a broad reexamination of Bureau practices as detailed in MBA's CFPB 2.0: Advancing Consumer Protection white paper. CIDs are used by the Bureau to request information that may be relevant to a potential violation of consumer financial protection law. Responding to a CID is a very burdensome process that can involve significant resources and reputational harm. The letter describes aspects of the current CID process that are unfair, including the overly broad notification of purpose statements, the low threshold of initiating an investigation, the inadequate CID challenge process, and the unrealistic timelines. These and other aspects of the current CID process contribute to an imbalance between the Bureau and CID recipient that's contrary to due process protections. The comment letter offers suggestions to correct this imbalance in a way that recognizes the costs and reputational risks to CID recipients.

U.S. Treasury Details Accomplishments on Regulatory Reform Agenda

The Treasury Department released a report detailing its accomplishments in support of the President's regulatory reform agenda. This includes increasing accountability and reducing regulator uncertainty at the CFPB, as well as implementing changes for the Financial Stability Oversight Council designation of non-banks as systemically important.