CREF Highlights: Randal Quarles, CNA e-Tool and Disparate Impact Rule

Commercial and multifamily developments and activities from MBA relevant to your business and our industry.

Senate Confirms Federal Reserve Vice Chair for Supervision Quarles to Full Board of Governors Term
Last Wednesday the Senate voted to confirm Randal Quarles to a full 14-year term on the Federal Reserve Board of Governors.

The Senate originally installed Quarrels as Vice Chair for Supervision in October of last year, a role created in the Dodd-Frank Act to be the nation’s top regulatory manager. Quarles has presided over a number of regulatory reform and relief efforts since assuming office including proposed changes to the Volker Rule, HVCRE rules, and capital requirements. Quarles’ term as Vice Chair for Supervision expires in 2021 and his term on the Federal Reserve Board of Governors ends in 2032. For additional information, contact Bruce Oliver at

Fifth Circuit Federal Court Finds FHFA Structure Unconstitutional
In a July 16 decision, a panel of the Fifth Circuit U.S. Court of Appeals ruled that the structure of the Federal Housing Finance Agency, which regulates Fannie Mae, Freddie Mac and the Federal Home Loan Banks, was unconstitutional. The court ruled that FHFA was too insulated from Presidential supervision, offering similar reasons to those previously employed by other courts finding the structure of the Bureau of Consumer Financial Protection (BCFP/CFPB) to be unconstitutional (including an opinion penned by SCOTUS nominee Brett Kavanaugh). For more information, contact Meghan Sullivan at or Erin Barry at

The FHFA case was brought by Fannie Mae and Freddie Mac shareholders suing to challenge an amendment to the GSEs’ agreement with Treasury that called for virtually all GSE capital to be “swept” to Treasury. Consistent with prior rulings in other courts, the Fifth Circuit panel affirmed the lower court’s dismissal of the shareholders’ challenge to the Sweep Amendment. However, as noted, the Court of Appeals also sent the case back to the lower court with an instruction to enter judgment declaring that the statutory “for cause” limitation on removal of the FHFA Director violates the Constitution’s separation-of-powers. The ruling did not otherwise invalidate any statutes underlying of FHFA’s authority. For additional information, contact Bruce Oliver at

MBA Receives Positive Letter Response from HUD Regarding the CNA e-Tool
Last Tuesday, MBA received a letter from HUD responding to comments submitted earlier this year detailing member concerns with the CNA e-Tool. Use of the CNA e-Tool is an underwriting requirement for FHA multifamily loans, and the e-Tool is intended to help streamline and standardize the collection of information. The letter acknowledged the urgency of member concerns and committed to prioritizing their resolution. MBA has been working with HUD to improve the tool’s functionality and expects an updated version to be released this summer. For additional information, contact Sharon Walker at

HUD Seeking Comment on Disparate Impact Rule By Aug. 20
As we previously informed you, HUD published an advanced notice of proposed rulemaking (ANPR) soliciting public comment on possible amendments to HUD’s 2013 final rule implementing the Fair Housing Act’s disparate impact standard. While the scope of potential changes to the disparate impact rule remains uncertain, it could have far-reaching impacts. Comments are due by August 20. If you have any comments or questions on this matter, contact Sharon Walker at and Bruce Oliver at

BCFP Nominee Kraninger Testifies in Nomination Hearing before the Senate Banking Committee
Bureau of Consumer Financial Protection (BCFP/CFPB) nominee Kathleen Kraninger testified last week in a contentious nomination hearing before the Senate Committee on Banking, Housing, and Urban Affairs. As expected, Senators’ questions focused on her experience in financial services and consumer regulation as well as her independence. Earlier in the week, Senate Democrats requested the hearing be postponed until they received answers regarding Ms. Kraninger’s involvement with the zero tolerance immigration policy and the hurricane recovery efforts in Puerto Rico. For more information, contact Erin Barry at

MBA Education’s Introduction to Commercial Loan Servicing
On August 1, MBA Education will start a four-week course with the overall goal of introducing the final stage in the commercial lending cycle, servicing. The course will provide an overview of the servicer’s role and how the servicer interacts with the borrower, lender and investors and the difference in servicing requirements depending on type of capital source. 

To register for this course, click here. For more information, contact Gail Griffith at