CREF Policy Update June 16, 2022

Mike Flood mflood@mba.org; Bill Killmer bkillmer@mba.org.

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

Last Wednesday, FHFA released the GSEs’ Equitable Housing Finance Plans for 2022-2024. Also, the Senate Banking Committee advanced the nominations of Michael Barr to be the next Federal Reserve Vice Chairman for Supervision and Jaime Lizárraga and Mark Uyeda to be SEC Commissioners.  

Sign MBA’s Home for All Pledge: Join the 260+ MBA member companies that have signed MBA’s Home for All Pledge, representing a commitment to promoting affordable rental housing; minority homeownership; and company diversity, equity, and inclusion. One senior executive (e.g., CEO, COO, President, Head of Lending, SVP) is encouraged to sign this online form on behalf of your organization.

FHFA Announces 2022-2024 Equitable Housing Finance Plans for Fannie Mae and Freddie Mac 

On Wednesday, the Federal Housing Finance Agency (FHFA) released the GSEs’ Equitable Housing Finance Plans for 2022-2024. The plans are designed to address racial and ethnic disparities in homeownership and rental housing, particularly in Black and Latino communities, and will be updated annually. Any action taken under the plans will still require final approval of FHFA.

• Why it matters: The plans contain a variety of objectives that are aimed at supporting renters and creating more safe, affordable rental housing in underserved markets. Some key areas of the plans specifically seek to help renters manage security deposits, increase affordable supply, and assist renters in building credit profiles through rental payment history.
• What’s next: MBA will analyze the impact of the GSEs’ plans and will communicate all relevant information to members.

For more information, please contact Stephanie Milner at (202) 557-2747.

Treasury Secretary Yellen Testifies Before House and Senate Panels 

This week, U.S. Treasury Secretary Janet Yellen testified before both the Senate Finance and House Ways and Means Committees on the Biden administration’s Fiscal Year 2023 (FY23) budget request. As expected, much of the dialogue at both hearings focused on the Biden administration’s efforts to combat inflation and rising gas prices. There was also discussion about the OECD global minimum tax, Foreign Tax Credits, the national debt, the deficit, and increased funding for the Internal Revenue Service (IRS).

• Why it matters: In both hearings, House and Senate members promoted tax investments for the production of affordable housing units, including the expansion and strengthening of the Low-Income Housing Tax Credit (LIHTC), and the creation of a new low- to moderate-income (LMI)-targeted residential rehabilitation tax credit (the Neighborhood Homes Investment Act) as solutions to help curb the impacts of inflation. MBA continues to support bipartisan, bicameral efforts promoting these housing credits as part of any tax and reconciliation package that Congress may still consider before year’s end.
• What’s next: A more detailed summary of both Yellen hearings can be found here. Congress has begun drafting its FY23 funding bill with legislative mark-ups slated to begin in the House next week. With Congress unlikely to reach agreement to move all 12 separate appropriations bills before September 30, 2022, legislators will have to pass a stop-gap continuing resolution to keep the government operating beyond October 1, 2022.

For more information, please contact Alden Knowlton at (202) 557-2741 or Borden Hoskins at (202) 557-2712.

Federal Reserve, SEC Nominees Receive Bipartisan Approval from Senate Banking Panel

The Senate Banking Committee on Wednesday voted 17-7 to support Michael Barr, a veteran of the Obama and Clinton administrations, for a four-year term as the Federal Reserve’s Vice Chairman for Supervision. Five Republicans (and the committee’s Democrats) voted for Barr, including Senator Pat Toomey (R-PA), the panel’s Ranking Member. By voice vote, the committee also approved Republican Mark Uyeda and Democrat Jaime Lizárraga as nominees for the Securities and Exchange Commission (SEC).

• Why it matters: Barr, once confirmed, will be the Fed’s top banking regulator and will play a significant role regarding policies impacting the C/MF sector, including proposed revisions to the Community Reinvestment Act. Lizárraga and Toshiro’s confirmations would solidify a Democratic majority at the SEC as it considers climate change and environmental, social, governance (ESG)-related rulemakings.
• What’s next: Support from members of both parties means the nominees will face just two remaining procedural Senate floor votes to be fully confirmed. Timing for that floor consideration is now deemed possible prior to July 4.

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

FHFA Announces New Pilot Transparency Framework for the GSEs

Last week, FHFA announced a new pilot transparency framework for the GSEs. The framework requires each GSE to publish and maintain a list of pilots and test-and-learn activities on its public website. The initial lists have been posted and include the name, description, status, and scope for each pilot.

• Why it matters: This new framework will provide transparency and accountability in determining whether GSE pilot programs are achieving their intended outcomes. It also aligns with longstanding MBA advocacy in support of greater transparency on pilot programs to ensure that they have clearly defined objectives and timelines, and – if deemed successful – eventually are made available to all eligible companies regardless of size or business model.
• What’s next: The lists of GSE pilots will be refreshed every year in April and October. MBA will continue to partner with FHFA on this and other critically important housing issues.

For more information, please contact Stephanie Milner at (202) 557-2747.

Federal Reserve to Release CECL Tool

The Federal Reserve last week announced that it will release a second tool to help community financial institutions implement the Current Expected Credit Losses (CECL) standard.

• Why it matters: According to the Federal Reserve, the Expected Losses Estimator (ELE) utilizes a financial institution’s loan-level data and management assumptions to aid community financial institutions in calculating their CECL allowances.
• What’s next: The ELE tool will be launched during an “Ask the Fed” webinar on June 16, 2022. 

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

New York Governor Signs Hotel Conversion Bill 

Last Tuesday, New York Governor Kathy Hochul signed new legislation (S.4937C/A.6262B) into law to incentivize the conversion of underutilized hotel space into permanent housing.

• Why it matters: The bill gives New York City the power to approve underutilized hotels in New York City to be converted into affordable housing.
• What’s next: Earlier this year, the Legislature provided $200 million in budgetary funding for this hotel-to-housing conversion program.

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

State Trackers

• State eviction moratorium and legislative activity tracker available here and here.

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

Register for VOICES: Courageous Conversations with Men of Color

MBA is pleased to extend its award-winning webinar series, Voices: Courageous Conversations with Women of Color, to include a new conversation focusing on the male experience. Hear from a dynamic and diverse lineup of male industry leaders on their personal journeys throughout their careers. This timely conversation will inspire and inform while giving voice to the challenges and lessons learned.

There will be two sessions highlighted in this series:

• June 21: Courageous Conversations with Men of Color
• July 19: Courageous Conversations with Men as Allies

What’s next: This virtual series is complimentary for MBA Members. Learn more here.

For more information, please contact the DEI team. 

Upcoming 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 webinars – which are complimentary to MBA members:

• CONVERGENCE: Understanding and Serving Today’s Buyer – June 23
• Leveling Up Your Social Media Strategy with Paid Advertising – June 28
• How to Navigate Lower Margins and a Tighter Market Through Effective Leadership and Embracing Technology – June 28

MBA members can register for any of the above events and view recent webinar recordings. For more information, please contact David Upbin at (202) 557-2931.