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CREF Highlights June 18, 2020

June 15, 2020

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

NAIC Extends Modification Period Under Life Company RBC Guidance

On Friday the Financial Condition (E) Committee of the National Association of Insurance Commissioners (NAIC) voted unanimously to extend the modification period covered by its March 27 life company risk-based capital (RBC) guidance for COVID-19-related modifications. The modification, which would have ended June 30, was extended to September 30, 2020. John Waldeck of Pacific Life presented before the Committee on behalf of both MBA and the American Council of Life Insurers (ACLI). The extension provides time for NAIC’s Life RBC Working Group to issue guidance on RBC reporting issues arising out of the unusual circumstances of 2020. MBA and ACLI submitted a request for guidance to that Working Group on Monday, which includes a request to extend the modification period to the end of 2020.

  • Why it matters. The extension gives life companies more runway to work with borrowers to address the impacts of the pandemic and to make prudent modifications as appropriate.
  • What’s next. MBA and ACLI will be working with the NAIC Life RBC Working Group to obtain the necessary guidance on RBC reporting.

For additional information, or to participate in MBA’s Life Company RBC Working Group, contact Bruce Oliver at 202-558-2840.

2. Treasury Secretary Pushes for More Economic Relief in Senate Hearing

Last Wednesday, U.S. Treasury Secretary Steven Mnuchin strongly backed the move for new COVID-19-related relief legislation to put more money into the economy, but said the aid must be targeted at helping specific businesses reopen. In testimony before the Senate Small Business Committee, Mnuchin said unemployment was too high and that administration officials wanted to work on further economic incentives. Possible avenues he floated included changes to the small-business-focused Paycheck Protection Program (PPP) and tax credits. A summary of the hearing can be found here.

  • Why it matters: Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza appeared before the panel as lawmakers take stock of economic relief programs and consider how to direct aid in follow-up legislation that will likely be negotiated prior to the scheduled August recess.
  • What’s next: The small-business aid programs that were the focus of the Senate Small Business hearing may be extended and revamped as part of future House/Senate negotiations. More than $130 billion remains available for loans under PPP, and lawmakers are also looking at ways to direct the money to underserved borrowers, including minority-owned businesses. Sen. Ben Cardin (D-MD) and other Democrats said they planned to introduce a bill that would let businesses with 100 or fewer employees apply for a second PPP loan.

For more information, please contact Tallman Johnson at (202) 557-2866 or Ethan Saxon at (202) 557-2913.

. MBA’s Kelli Burke Named #NEXTPowerhouseAwards Award Winner

This week, Kelli Burke, MBA’s Vice President of Commercial Real Estate Finance, was named an award recipient of the inaugural #NEXTPowerhouseAwards presented by NEXT Mortgage Events & News. The #NEXTPowerhouseAwards aim to highlight women in the industry who serve as a cornerstone for discovering new ideas and ways to advance their companies.

  • In a press release, MBA’s Mike Flood said, “Kelli is a core member of MBA’s commercial-multifamily team, and her background, deep industry knowledge, and execution help her effectively engage with and advocate on behalf of our members. I can think of nobody more deserving of this recognition and am confident she will continue to deliver substantive results for our members.”
  • What’s next: Burke will be recognized at #NEXTSUMMER20, NEXT’s first virtual executive summit, on August 23-25, 2020.

For more information or to congratulate Kelli Burke, please contact her at (202) 557-2742.

4. California Assembly Appropriations Committee Approves Problematic Forbearance Legislation

California Assembly Bill 2501, which would enact sweeping new forbearance standards beyond federal CARES Act mandates for multifamily mortgages, was approved this week by the Assembly Appropriations Committee. Ahead of the Committee’s vote, MBA and the California MBA signed on to a detailed letter noting the many issues with the proposal. The bill could receive a full Assembly vote as soon as today.

  • Why it matters: The industry has serious concerns with this bill. These views are detailed in the rebuttal to the sponsor by the mortgage industry coalition.
  • What’s next: If the bill is approved by the Assembly, MBA will work with the California MBA to target members of the Senate to oppose the bill unless significant improvements are made. MBA members in California are strongly encouraged to take action today through the Mortgage Action Alliance (MAA).

For more information, contact William Kooper at (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

California Senate Bill to Permit Commercial Tenants to Void Leases Placed on Suspension in Key Committee

California Senate Bill 939, which is already the focus of a MAA Call to Action, would enable commercial tenants to unilaterally terminate leases, release any third-party guarantees, and limit to three months the tenant’s liability for unpaid rent after termination of the lease. The bill also would prohibit property owners from taking any actions on unpaid rents for commercial tenants and would impose fines on landlords for communications with tenants that may be deemed actions “threatening” to terminate occupancy for nonpayment of rent. The bill was already approved by the Senate Judiciary Committee but has now been placed on “suspension” in the Appropriations Committee.

  • Why it matters: The Committee must now approve the bill in time for the Senate to pass it with a two-thirds vote ahead of a June 18 procedural deadline.
  • What’s next: MBA and the California MBA will continue to work together with other industry partners to oppose this harmful legislation. Additionally, MBA members in California are strongly encouraged to take action through the Mortgage Action Alliance’s Call to Action by clicking here.

For more information, please contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

6. Colorado Legislature Passes Remote Online Notarization Legislation

Last week legislation (SB20-096) that would authorize Remote Online Notarization (RON) in Colorado unanimously passed both houses of the state legislature. The bill conforms to the approach taken in model legislation developed by MBA and the American Land Title Association (ALTA), which is available on the MBA RON Resource Center.

  • What’s next: The bill will now be transmitted to Governor Jared Polis for his signature.
  • Why it matters: If approved, Colorado will become the 25th state to approve RON, a critical threshold providing even more momentum to MBA’s national campaign.

For more information, contact Kobie Pruitt at (202) 557-2870.

7. Colorado Lawmakers Withdraw Proposal to Bar Actions to Collect Rents
This week, Colorado lawmakers elected not to introduce a bill that would have put in place a moratorium to demand rent or filing any claims to obtain rent through May 2, 2021. In addition, the eviction process would be relegated to a two-month process so owners could not reclaim their property until June 2021 and, should an owner make a written demand to a tenant for rent payments subjects the owner to penalties of three months’ rent or $3,000 plus attorney fees. The bill, which had been circulating as a discussion draft, was ultimately not introduced prior to the deadline for bills to be considered during this session of the Colorado legislature.

  • Why it matters: The bill could have been severely disruptive to multifamily property owners.
  • What’s next: The Colorado legislature is expected to adjourn this weekend.

For more information, please contact William Kooper at (202) 557-2737 or Kobie Pruitt at (202) 557-2870.

8. Recent and Upcoming MBA Education Webinars on COVID-19-Related Topics

MBA Education continues to deliver timely single-family and commercial/multifamily programming that covers the spectrum of challenges, obstacles, and solutions pertaining to the ongoing COVID-19 pandemic. Below, please see a list of upcoming and recent webinars – which are complimentary to MBA members:

MBA members can access the full list of COVID-19 webinar recordings by clicking here.

For more information, contact David Upbin at (202) 557-2890.

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