CREF Policy Update: Hearing Recap: Senate Budget Committee on the Impacts of Climate Change on Insurance Markets
Hearing Recap: Senate Budget Committee on the Impacts of Climate Change on Insurance Markets
Last Wednesday, five private sector witnesses testified on the impacts climate change is having on insurance markets, insurance costs, mitigation efforts and data collection, and overall concerns about impacts on the financial system.
• As expected, discussion and questions from Senators broke along party lines, with Democrats focusing on climate change as the proximate cause of insurance issues while most Republicans rejected the premise that climate change has had a significant impact on insurance rates and availability. A full summary of the hearing may be found here.
Go deeper: Of note, Senator Tim Kaine (D-VA) called attention to the high insurance rates on multifamily housing, and Ranking Member Chuck Grassley (R-IA) discussed inflation as the driver of rising insurance costs.
Why it matters: MBA and industry professionals are keenly aware of the increased concerns regarding rising property insurance costs and declining offerings and remain in ongoing dialogue with federal and state regulators and lawmakers on both sides of the aisle.
What’s next: MBA will continue to monitor this issue and seek opportunities to contribute to the dialogue in ways that are helpful to members.
For more information, please contact George Rogers at (202) 557-2797 or Ethan Saxon at (202) 557-2913.
Treasury Secretary Yellen Testifies on FY 2025 Budget Before Senate Appropriations Subcommittee
Last Tuesday, Treasury Secretary Janet Yellen testified before the Senate Appropriations Committee’s Subcommittee on Financial Services and General Government (FSGG) regarding the Treasury’s Fiscal Year (FY) 2025 budget request. A full summary of the hearing may be found here.
Why it matters: The hearing provided an update on implementation of the Inflation Reduction Act, Internal Revenue Service (IRS) programs, and federal debt issuance. Chairman Chris Van Hollen (D-MD) highlighted the Biden administration’s efforts to address a lack of affordable housing and the need to take additional steps, such as housing tax credits.
What’s next: The Senate Appropriations Committee will start its consideration of FY25 spending bills in July, including the FSGG measure which allocates funding for key agencies such as the IRS and Treasury, the Securities and Exchange Commission (SEC), the Federal Housing Finance Agency (FHFA), the Small Business Administration (SBA), the Federal Trade Commission (FTC), and the White House.
For more information, please contact George Rogers at (202) 557-2797 or Ethan Saxon at (202) 557-2913.
MBA, California MBA Launch Call to Action on Insurance Crisis
Last week, MBA and the California MBA (CMBA) issued a Mortgage Action Alliance (MAA) Call to Action asking member residents to call on Governor Gavin Newsom, state legislators, and Insurance Commissioner Ricardo Lara to take immediate action to fix the state’s broken insurance system.
• Reform is needed by the Department of Insurance to modernize how insurance rates are set and regulated to ensure that property owners have access to policies in a competitive market, with reliable rates, and with coverage levels that protect their investments.
Why it matters: California–and other individual states–are facing serious crises due to the lack of fully competitive markets for property insurance. Commercial/multifamily and other business property owners are getting dropped from coverage by their insurance carriers, facing uncompetitive costly new policies, or having to turn to California’s state-issued FAIR plan or force-placed insurance alternatives as a last resort.
The bottom line: Governor Newsom has proposed Budget Trailer Bill Language that could help expedite the rate reform process – a move supported by both CMBA and MBA while urging adoption by the California Legislature in the next two weeks. Additionally, CMBA and MBA are hopeful Insurance Commissioner Lara’s recent promises for reforms through his Sustainable Insurance Strategy come to fruition.
What’s next: If you are a resident of California and have not taken action yet, please click here to do so now.
For more information, please contact William Kooper (202) 557-2737 or Liz Facemire at (202) 557-2870.
For more information about MAA, please contact Jamey Lynch (202) 557-2818.
Commercial Mortgage Delinquency Rates Increased in the First Quarter of 2024
Commercial mortgage delinquencies increased in the first quarter of 2024, according to the Mortgage Bankers Association’s (MBA) latest Commercial Delinquency Report, released Tuesday.
Jamie Woodwell, MBA’s Head of Commercial Real Estate Research, said, “Commercial mortgage delinquency rates continued to increase during the first three months of 2024. The increase was seen across most capital sources, pointing to the challenges caused by loans that are maturing amid higher interest rates, uncertain property values, and questions about some properties’ fundamentals.”
For more information, please contact Jamie Woodwell at (202) 557-2936.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family and commercial/multifamily programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars–which are complimentary to MBA members:
• Automating Efficient and Empathetic Servicing Experiences for Your Borrower – June 4
• Bank-Owned Mortgage Divisions: What Bankers Need to Know to Manage Mortgage Banking – June 11
• Best Practices for Ensuring Clarity, Speed and Compliance in Borrower Communications – June 13
• Adding Reverse Mortgages to Your Business Line: The Value Proposition – June 20
• Unpacking the Costs and Current State of Homeowners Insurance – June 20
• Fundamentals of Loss Mitigation for Residential Servicers – June 25
• What is the True ROI for Digital Closings? – June 25
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For any questions, please contact David Upbin at (202) 557-2931.
