Home > CMF Newslinks > MBA Commercial/Multifamily NewsLink Oct. 1, 2020

CREF Highlights Oct. 1, 2020

September 28, 2020 |By Mike Flood

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

Last week the CFPB published protections and resources for renters on its website regarding the CDC’s national eviction order. On Tuesday, FHFA published an updated strategic plan for fiscal years 2021-2024. And finally, we have added a new state rental assistance program tracker to our list of resources that members can use to understand the resources available to tenants. This new resource compliments MBA’s CREF State Eviction Moratorium Tracker and CREF State Legislative Roundup, both which keep members abreast of state advocacy issues.

  1. CFPB Publishes Eviction Protection Resources for Renters
    This week, the Consumer Financial Protection Bureau (CFPB)     published protections and resources for renters on its website regarding the Centers for Disease Control and Prevention’s (CDC) national eviction order.
  • Why it matters: The resource provides links and explanations of the CDC’s eviction moratorium, resources for renters to find out if they are protected, and an explanation that rent payments are still due.
  • What’s next: The CDC’s eviction moratorium expires on December 31, 2020. MBA is continuing to advocate for rental assistance to renters and landlords.

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

2. FHFA Highlights GSE Reform Priorities in New Strategic Plan
On Tuesday, the Federal Housing Finance Agency (FHFA) published an updated strategic plan for fiscal years 2021-2024. This strategic plan highlights FHFA’s ongoing and future efforts to oversee and reform the GSEs, as well as improve its own operations. Many of the reforms identified in the strategic plan align with those supported by MBA, including “a fair playing field for large and small lenders,” steps to ensure the activities of the GSEs “stay within the bounds of their charters”. FHFA also notes its intention to “responsibly end the conservatorships” of Fannie Mae and Freddie Mac, as well as its desire for greater examination authority with respect to nonbank servicers.

  • Why it matters: This strategic plan provides a roadmap of FHFA Director Calabria’s priorities for FHFA, Fannie Mae, Freddie Mac, and the Federal Home Loan Banks in the coming years. The objectives contained within the strategic plan will guide FHFA’s actions as conservator and regulator, which in turn will have a significant impact on the health of the mortgage market.
  • What’s next: FHFA will accept public comments on the strategic plan through October 5, 2020. MBA will submit comments.

For more information, please contact Dan Fichtler at (202) 557-2780 or Bruce Oliver at (202) 557-2840.

3. Eviction Moratorium and State Legislative Roundup Tracker
MBA has compiled a new member resource outlining current state and local rental assistance programs or resources. We will continue to provide weekly updates of these member resources.

  • MBA’s CREF State Eviction Moratorium Tracker can be found here.
  • MBA’s CREF State Legislation Roundup can be found here.
  • MBA’s State Rental Assistance Tracker can be found here.
  • Maps of current state issues can be found here.

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

4. MBA Signs Joint Trade Letters to Congress Supporting Rental Assistance
On Tuesday and Wednesday, MBA signed joint trades letters to the House Financial Services Committee and the Senate Health, Education, Labor, and Pension Committee urging Congress and the Administration to provide rental assistance to tenants. 

  • Why it matters: MBA has been working with a coalition of industry trade associations to help encourage policymakers to provide rental assistance. These letters are part of dozens of communications MBA has sent to policymakers urging the passage of rental assistance.
  • What’s next: MBA will continue to advocate for Congress and the Administration to support rental assistance as policymakers negotiate further stimulus.

For more information, please contact Bruce Oliver at (202) 557-2840 or Grant Carlson (202) 557-2765.

5. NAIC Expedites Exposure of MBA/ACLI Proposal on RBC Treatment of 2020 NOI
Today, the National Association of Insurance Commissioners (NAIC) Life Risk-Based Capital Working Group agreed to an expedited exposure of risk-based (RBC) reporting instructions to implement the MBA/American Council of Life Insurers (ACLI) proposed RBC treatment of 2020 Net Operating Income (NOI). RBC reporting instruction changes must be exposed for comment before they can be approved. Proposed RBC reporting instructions to implement the NOI proposal will be exposed for a very brief one week period and then will be acted on by the NAIC Working Group on October 9, 2020. The NOI proposal is the last of four MBA/ACLI proposals to address the RBC impacts of COVID-19. In July, the Working Group approved requests (1) to extend the June 12, 2020 RBC Guidance through December 31, 2020 reporting; (2)  treat construction loans temporarily paused by governmental directive favorably; and (3) to apply a 2019-2020 average NCREIF price index for year-end 2020 RBC reporting.

  • Why it matters: The NOI proposal is designed to prevent RBC reporting of large drops in NOI as a result of COVID-19 from overstating the long-term credit risk impacts of 2020 business interruptions.
  • What’s next: The NAIC Working Group will act on the proposed RBC reporting instruction changes on October 9, 2020, and will then issue guidance on all of the COVID-19-related changes. The Working Group also agreed to begin consideration of an industry proposal to reduce the RBC factors for equity investments in real estate, a proposal that has not progressed for several years, which is a very positive development.

For additional information or to join MBA’s Life Company RBC Working Group, please contact Bruce Oliver at (202) 557-2840.

6. FSOC Urges Oversight of the GSE’s Secondary Market Role
Today, the Financial Stability Oversight Council (FSOC) and Fannie Mae and Freddie Mac need additional oversight of their secondary market role.

  • Why it matters: FSOC is a panel of regulators created to guard against financial instability. FSOC called for oversight to be conducted by FHFA.
  • What’s next:  FHFA is expected to release its revised multifamily caps within weeks.

For more information, please contact Bruce Oliver at (202) 557-2840.

7. California Governor Extends Commercial Eviction Moratorium Flexibilities
On Thursday, California Governor Gavin Newsom signed an executive order allowing local governments to continue banning commercial evictions until March 31, 2021. 

  • Why it matters: This order was set to expire on September 30, 2020.
  • What’s next: MBA will work with the California MBA to monitor local government actions.

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

8. House Passes Continuing Resolution
On Tuesday, the U.S. House of Representatives passed a continuing resolution (CR) to fund the federal government through December 11, 2020. The House spending bill received a rare bipartisan vote of 359-57 after both parties smoothed out significant disagreements around farm spending. The bill maintains government spending levels, reauthorizes the National Flood Insurance program through September 2021, and buys Congress time to further negotiate FY 2021 spending levels. 

  • Why it matters: The House’s CR passage clears the deck for members to focus on their 2020 congressional races, as well as the upcoming presidential election, while avoiding a government shutdown. Though still under discussion, the likelihood of any further coronavirus-related relief legislation before the 2020 elections is unclear at best. 
  • What’s next: The U.S. Senate is slated to vote on the House CR next week. 

For more information, please contact Ernie Jolly at (202) 557-2741 or Bill Killmer at (202) 557-2736. 

9. House Passes Bill on NRSROs
The House passed by voice vote a bill to ensure that all nationally recognized statistical rating organizations (NRSROs) – regardless of their size – are treated equally under the Fed’s facilities established to respond to the coronavirus pandemic and its economic fallout. Introduced by Representatives Madeleine Dean (D-PA) and Andy Barr (D-KY), along with Financial Services Chairwoman Maxine Waters (D-CA), the Uniform Treatment of NRSROs Act (HR 6394) would also maintain the discretion of regulators to exclude the use of certain NRSROs within Federal Reserve facilities, but only after presenting evidence that those NRSROs are “unreliable or ill-suited” for particular asset classes. The bill also requires a government study on the quality of credit ratings among NRSROs, the effect of competition on credit ratings and capital market access, and the implementation of the bill. MBA sent a letter to House members in support of this measure.

  • Why it matters: While actual amendments to the CARES Act have been rare, this legislation represents an area where both Democrats and Republicans agree that more should be done to ensure small and medium sized businesses — including those that are rated by smaller NRSROs — can better access the Federal Reserve’s support during the current crisis. 
  • What’s next: MBA expects a bipartisan group of Senators to introduce a companion bill, making the prospects of enactment of this legislation possible before year’s end. 

For more information, please contact Ernie Jolly at (202) 557-2741.

10. Federal Reserve Issue Rulemaking Notice on CRA Changes
On Tuesday, the Federal Reserve Board of Governors issued an advanced notice of proposed rulemaking (ANPR) proposing changes to the Community Reinvestment Act (CRA). The Federal Deposit Insurance Corporation (FDIC) issued new CRA rules in May 2020 and will finalize implementation in 2022. 

  • Why it matters: While CRA rules are currently uniform between banking regulators, when the proposed FDIC rules are implemented, these regulations will differ. The proposed changes would alter the credit banks receive for the financing of multifamily housing.
  • What’s next: Comments will be due 120 days after publication in the Federal Register. 

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

11. HUD Issues Final Disparate Impact Rule
On Thursday, the U.S. Department of Housing and Urban Development’s (HUD) Fair Housing Act (FHA) disparate impact rule was published in the Federal Register. The rule attempts to align the FHA’s disparate impact standard with the standard articulated in the Supreme Court’s 2015 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project. In addition to explaining the elements a plaintiff must show to establish that a policy or practice has a discriminatory effect, the final rule lays out a three-step burden shifting framework and lists specific defenses that defendants may raise to refute a plaintiff’s claim. MBA’s summary of the rule is available here.

  • Why it matters: This rule announces a new standard for disparate impact claims to reflect the 2015 Inclusive Communities decision that requires strong standards of proof from plaintiffs bringing these cases.
  • What’s next: The final rule has an effective date of October 26, 2020.

For more information, please contact Justin Wiseman at (202) 557-2854, Lucia Jacangelo at (202) 557-2941, Blake Chavis at (202) 557-2930 or Bruce Oliver at (202) 557-2840. 

12. Treasury Releases Requested CECL Report
Last week, the Treasury Department issued a report in response to a congressionally-mandated study on the current expected credit losses (CECL). The report drew no conclusions because CECL has not been fully implemented by all entities, and numerous market factors relating to the COVID-19 global pandemic (including government responses) have affected the economy, financial institutions, and borrowing and lending dynamics.

  • Why it matters: Over the last few years, industry has urged the Financial Accounting Standards Board (FASB), Treasury, Congress and the banking regulators to pause CECL implementation, and in the meantime, conduct a detailed study of CECL’s potential effects on and implications for regulatory capital, lenders, borrowers, and the U.S. economy. 
  • What’s next:  It is expected that the report will be the subject of upcoming congressional hearings.

For more information, please contact Fran Mordi at (202) 557-2860 or Bruce Oliver at (202) 557-2840.

13. HUD Releases Updated COVID-19 Guidance
Last Friday,the U.S. Department of Housing and Urban Development (HUD) Multifamily Housing released updated COVID-19 guidance releasing a joint notice along with the Office of Public and Indian Housing. The guidance provides instructions to PHAs on using portions of the CARES Act funds in RAD Conversions. The Office of General Counsel added new guidance to Multifamily Closing FAQs for COVID-19.

  • Why it matters: It is important to provide MBA members with current guidance that enables them to respond appropriately to servicing inquiries related to the COVID-19 pandemic.
  • What’s next: MBA will continue to work with HUD officials to ensure that timely guidance is provided, and we will provide updates as the situation develops.

For more information, please contact Sharon Walker at (202) 557-2747.

14. Upcoming and Recent MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely 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:

MBA members can access the list of recent webinar recordings by clicking here.

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

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