MBA Leads Industry Groups in Submitting Comments Related to Basel III Proposed Rulemaking

The Mortgage Bankers Association last week led a group of housing and industry trade groups in submitting a comment letter highlighting critical concerns and recommendations related to the Notice of Proposed Rulemaking regarding the implementation of the final components of the Basel III standards.

MBA, joined by the National Association of Realtors, National Association of Home Builders, Community Home Lenders of America, United States Mortgage Insurers and Manufactured Housing Institute, noted the so-called Basel “end game” proposal will impact more than three dozen large U.S. banks.

The NPR was issued by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Board of the Governors of the Federal Reserve System.

“The rule will have far-reaching implications not just for housing but for the broader economy and was issued with virtually no economic impact analysis and few justifications for the mortgage-related changes,” the letter stated.

The letter levied a few criticisms–pointing to provisions that would directly impact the mortgage and housing markets–including the proposed revision to risk weights assigned to mortgages held on a bank’s balance sheet; the proposed reduction in the cap on MSR holdings; and the proposed increase in the capital requirements on warehouse lines of credit.

The letter provided a number of recommendations related to the highlighted issues.

Ultimately, the letter noted that the groups “believe the NPR will diminish access to mortgage credit and further reduce the affordability of housing for first-time homebuyers and underserved communities–outcomes that are fundamentally at odds with key policy objectives of the current administration.”

Click here to read the full letter