CREF Policy Update Sept. 16, 2021

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

Last Wednesday, the New York Legislature passed an extension of the state’s tenant, commercial eviction, and foreclosure moratoriums until January 15, 2022. Also on Wednesday, the White House announced immediate steps it would take to increase affordable housing and rental housing supply across the country. Specific to multifamily lenders, this includes resumption of HUD’s Section 542 (c) Housing Finance Agency Risk-Sharing Program with the Treasury’s Federal Financing Bank and increasing the GSEs’ LIHTC equity caps. And the CFPB released a proposed rule last week that would require lenders to collect and report data on lending transactions, including commercial real estate lending where the borrower is a small business.

1. New York Legislature Extends Resident, Commercial, and Foreclosure Moratoriums

On Wednesday, the New York Legislature passed an extension of the state’s tenant, commercial eviction, and foreclosure moratoriums until January 15, 2022.

• Why it matters: Notably, New York is the only state with a statewide eviction moratorium for commercial or non-residential tenants.
• What’s next: Governor Kathy Hochul has pledged to sign the extension into law. We will also continue to work with the New York MBA to follow any developments.

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

2. White House Affordable Housing Release Announces Reinstatement of FFB Risk Share Program and Increase to GSE LIHTC Equity Caps 

On Wednesday, the White House announced that the U.S. Department of Housing and Urban Development (HUD) would resume the Section 542 (c) Housing Finance Agency Risk-Sharing Program with the U.S Department of Treasury’s Federal Financing Bank (FFB Risk-Sharing). This temporary program expired on January 1, 2019. As part of that announcement focused on affordable housing, the White House also announced that the Federal Housing Finance Agency (FHFA) would increase the GSEs’ annual low-income housing tax credit (LIHTC) equity investment cap to $850 million.

• Why it matters: MBA advocated for HUD to allow the FFB temporary program to expire in 2019 and sent several letters to HUD opposing its reauthorization.
• What’s next: MBA will work with HUD to suggest limits to the FFB program, so it does not crowd out MAP lenders or private capital.

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

3. CFPB Proposes Reporting Rule on Small-Business Lending

On Wednesday, the Consumer Financial Protection Bureau (CFPB) released a proposed rule that would require lenders to collect and report data on lending transactions, including commercial real estate lending where the borrower is a small business. The rule would implement section 1071 of the 2010 Dodd-Frank Act. Under the proposal, lenders would be required to collect and report the amount and type of small-business credit applied for, demographic information about small-business credit applicants (e.g., whether they are minority- or women-owned), and elements of the price of the credit offered.

• Why it matters: The reporting rule will impose a substantial burden on commercial and multifamily mortgage lenders and borrowers, absent a ready means of excluding borrowers that are not “small businesses.”
• What’s next: The comment period will run for 90 days after the proposal is published in the Federal Register. MBA will leverage our HMDA working group to develop its response to the proposal and will also work with other trade associations.

For more information or to participate in the comment process, please contact Bruce Oliver at (202) 557-2840.

4. Attorney General Calls for Legal Community to Address Evictions 

On Monday, U.S. Attorney General Merrick Garland called on the legal community and law schools to address evictions.

• Why it matters: The Attorney General called on the legal community to address coming evictions as a result of the Supreme Court’s decision last week invalidating the Center for Disease Control and Prevention’s (CDC) national eviction moratorium.
• What’s next: MBA will follow legal developments surrounding evictions and rental assistance.

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

5. Federal Enhanced Unemployment Benefits Expire 

Federal enhanced unemployment funds authorized in the CARES Act are set to expire next Monday, September 6, 2021.

• Why it matters: Enhanced unemployment benefits for gig workers and self-employed workers who do not traditionally qualify for unemployment assistance will expire along with the $300 in weekly enhanced federal unemployment assistance.
• What’s next: MBA will follow developments and watch monthly multifamily rental payments.

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

6. SBA to Invite Grantees Under Shuttered Venue Operators Grant Program to Apply for Supplemental Awards 

Late last week, the Small Business Administration (SBA) announced that it would begin sending invitations for supplemental awards under the Shuttered Venue Operators Grant (SVOG) Program. SVOG supplemental awards are to be provided to those who received an initial grant and have illustrated a 70% loss when comparing 2021’s first-quarter revenues to the same in 2019.

• Why it matters: Supplemental award applicants can choose to apply for any amount up to 50% of their original SVOG amount, with a $10 million cap of the initial and supplemental awards combined, according to the law. The supplemental awards also allow SVOG recipients to extend the time to use their grant funds for expenses accrued through June 30, 2022, and lengthen their budget period to 18 months from the initial grant’s disbursement date. 
• What’s next: The invitations for supplemental awards are expected to begin going out within two weeks. As of August 20, 2021, SVOG is no longer accepting new applications for new SVOG grants.

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

7. CLIMATE/ESG Updates

Treasury Requests Information on Insurance and Climate Risk

On Tuesday, the U.S. Department of Treasury’s Federal Insurance Office (FIO) issued a Request for Information (RFI) on climate-risk issues in the supervision and regulation of insurance companies. The RFI will guide the FIO’s focus on three initial climate-related priorities: (1) assessing climate-related issues or gaps in supervision, including their impact on U.S. financial stability; (2) assessing the potential for major disruption of private insurance coverage in U.S. markets that are particularly vulnerable to climate change impacts; and (3) increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals. The RFI is in response to President Joe Biden’s May 20, 2021, executive order on climate-related financial risk.

• Why it matters: Based on the information gathered from the RFI, the FIOs could recommend that the National Association of Insurance Commissioners (NAIC) and state insurance regulators to take action to address any climate risk gaps in the insurance industry.
• What’s next: MBA will work with members and other trades to develop a focusing principally on mortgage investments. The response period for the RFI runs through November 15, 2021.

CFTC’s Energy and Environmental Markets Advisory Committee to Meet on Climate and Other Issues

On September 15, the Commodity Futures Trading Commission’s (CFTC) meeting will feature a discussion on how the derivatives market can facilitate a transition to a low-carbon economy, including facilitating carbon reduction through carbon trading market mechanisms. The Energy and Environmental Markets Advisory Committee (EEMAC) will discuss and vote on a prior proposal to considered forming an EEMAC subcommittee. The goal will be to “to provide a report to the EEMAC on guiding principles for the design of the derivatives and underlying cash markets for environmental products, such as carbon allowances and offsets, that are used to address greenhouse gas emissions.”

• Why it matters: The CFTC and other financial regulators that traditionally have not been regulated in the climate space continue to consider climate change as part of their regulatory scope.
• What’s next: MBA will continue to monitor the actions of the CFTC and other financial regulators.

For more information or to get involved in climate and environmental, social, and governance (ESG) policy, please contact Adrian Ballinger at (202) 557-2774.

State Trackers

• State eviction moratorium and legislative activity tracker available here.

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

Participate in the New Diversity, Equity and Inclusion (DEI) Study

Sign up today to participate in a new offering to MBA members – the Diversity, Equity and Inclusion (DEI) Study. The study is separately designed and compiled for both the residential and commercial/multifamily sides of the real estate finance industry, and is administered by world-class human resources advisory firm McLagan, part of Aon plc. All participating companies are encouraged to complete as many sections of the study template as possible on the following topics: Policy and Initiatives; Headcount by Mortgage Job Function; Headcount by EEO-1 Categories; and Headcount by Movement.  

• Why it matters: Over the past year, racial and gender inequalities have shaped our nation’s conversation, and MBA remains committed to supporting our member companies by forming solutions. Participating will give our industry a baseline from which to improve and to see how member companies compare to the industry as a whole.
• What’s next: Individual company data will be kept confidential in accordance with McLagan’s high standards. As a bonus, MBA members save $1,000 off the regular survey pricing. The general timeline is provided in the registration form, with data due back to McLagan in mid-September and results released in October 2021.

For specific information about the DEI Study, please email Dave Rosenthal at McLagan or call (203) 326-4349. For general questions, please contact MBA Research members Marina Walsh at (202) 557-2817 or Jamie Woodwell at (202) 557-2936.

Webinar: Tax Advocacy Tuesdays at Two Thirty Returns in September

MBA’s next update takes place Tuesday, September 14, at 2:30 PM ET

• Why it matters: As the Biden administration and Congress negotiate on disclosed plans for trillions of dollars in new taxes and government spending, MBA is actively engaging policymakers on the proposals under consideration that would impact real estate finance. Get real-time insights and analysis on policy developments that significantly impact the commercial/multifamily finance ecosystem. Rotating MBA staff, members, and invited guests will share information, answer questions, and ensure you are well-informed and active participants in helping achieve the industry’s advocacy objectives.
  
  
• What’s next: This series will be offered through fall 2021 as developments dictate. It is closed to press. You may register for the entire series here.

For more information, please contact Andrew Foster at (202) 557-2740.

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:

• Budgeting and Financial Planning for Non-Believers – September 9
• Introduction and Walkthrough of MISMO’s Enhanced Logical Data Dictionary (LDD) – October 6

MBA members can register for any of the above events and view recent webinar recordings here.

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