CREF Policy Update March 17, 2022

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

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Thursday, the SEC announced that on March 21, 2022, it will consider whether to propose amendments to enhance and standardize registrants’ climate-related disclosures for investors. Today, the Wage and Hour Division (WHD) of the Department of Labor announced that it is proposing updated regulations implementing Davis-Bacon and related acts. And this week, both the House and Senate passed a $1.5 trillion Fiscal Year (FY) 2022 “omnibus” appropriations bill, which includes robust funding for HUD – and several wins for the industry.Sign MBA’s Home for All Pledge: Join the 190+ 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. 

Sign MBA’s Home for All Pledge: Join the 180+ 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) is encouraged to sign this online form on behalf of your organization.  

View Any Session You Missed from MBA CREF22: Were you one of the over 2,400 registrants that attended MBA’s Commercial/Multifamily Finance Convention & Expo? If you weren’t able to attend every session, they are available to you online for the next month. Simply access the program videos by clicking here. 

1. SEC Proposal on Climate Change and ESG Disclosure Possible Soon

On Thursday, the U.S. Securities and Exchange Commission (SEC) announced that on March 21, 2022, it will consider whether to propose amendments to enhance and standardize registrants’ climate-related disclosures for investors. This action could result in the release of the expected Notice of Proposed Rulemaking (NPRM) on climate change and environmental, social, and governance (ESG) disclosures. 

• Why it matters: The proposed rule could have impacts on commercial and multifamily borrowers, lenders, and investors.
• What’s next: When the expected NPRM is released, MBA will immediately share it with members and distribute a summary of the proposal. We will also form a working group to develop a response, as well as coordinate with other trade associations.

For more information, or to participate in the working group, please contact Adrian Ballinger at (202) 557-2774.

2. Labor Proposes Updated Davis-Bacon Regulations

Today, the Wage and Hour Division (WHD) of the Department of Labor announced that it is proposing updated regulations implementing Davis-Bacon and related acts. WHD describes the 432-page proposal as the product of the most comprehensive review of Davis-Bacon in 40 years. Among other provisions, the NPRM would reaffirm current WHD policy and practice on multiple wage rate (split-wage) determinations (see pp. 67-68, 346-347) and the effective dates for wage rate revisions for projects insured by the Federal Housing Administration (FHA) – i.e., a revised wage rate determination is effective if it is issued prior to the earlier of initial endorsement or beginning of construction (see pp. 348-349). The NPRM also addresses the process for establishing prevailing wage rates.

• Why it matters: Davis-Bacon wage rates apply to FHA-insured new construction and substantial rehabilitation projects. Current WHD policies and practices result in unwarranted and disruptive split-wage decisions and other impediments to increasing the supply of workforce and affordable housing.
• What’s next: MBA will work closely with FHA Committee members and the Davis-Bacon Working Group to analyze the proposal, summarize key points, and develop our response. The comment period will run for 60 days after the NPRM is published in the Federal Register.

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

3. Congress Advances Fiscal Year 2022 Omnibus Legislation

This week, both the House and Senate considered and passed a $1.5 trillion fiscal year 2022 “omnibus” appropriations bill, which includes robust funding for the U.S. Department of Housing and Urban Development (HUD) – and several wins for the industry. H.R. 2471, the Consolidated Appropriations Act of 2022, passed by a bipartisan vote of 249-180 in the House and 68-31 in the Senate. MBA President and CEO Bob Broeksmit, CMB, released a statement earlier in the week congratulating the House for final passage and urging swift action in the Senate. 

• Why it matters: MBA successfully secured the inclusion of favorable language related to the resolution of delays in the FHA’s Multifamily pipeline. Additionally, the bill includes the MBA-supported Adjustable Interest Rate (LIBOR) Act of 2021, which provides clear guidance and a consistent federal standard for determining a replacement benchmark rate for the London Interbank Offered Rate (LIBOR), including for tough legacy contracts. Please see MBA’s summary of additional relevant provisions.
• What’s next: President Biden will quickly sign the completed omnibus package into law. In the coming weeks, the administration is expected to release the President’s FY23 budget proposal, a blueprint of agency priorities provided to Congress as it begins the budget and appropriations process for the next fiscal year. This will kick off efforts in Congress to pass a new budget resolution, followed by work on 13 different appropriations bills, and a new opportunity for MBA and its members to engage policymakers and staff on industry priorities throughout this process. 

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

4. House Financial Services Committee Holds Hearing on Inflation and Supply Chain Issues

On Tuesday, the House Financial Services Committee (HFSC) held a hearing titled “Inflation Equation: Corporate Profiteering, Supply Chain Bottlenecks, and COVID-19.” With increases to the Consumer Price Index (CPI), record-high gas prices, and supply chain issues dominating news headlines, HFSC Chairwoman Maxine Waters (D-CA) convened the hearing to direct attention to the root causes of inflation. The hearing featured expert witnesses from the private sector to buttress the narrative of each party. Democrats blamed the current crisis on the 2017 Republican tax bill (TCJA) and corporate profiteering through “pandemic-related” price increases and the misuse of pricing power due to rampant consolidation across multiple industries. Republicans pointed to excess money supply and fiscal stimulus, additional costs and restrictions on investment arising from new rules and regulations, high energy costs, and supply chain issues as the basis for inflation. 

• Why it matters: One of the witnesses, Mark Zandi, Chief Economist, Moody’s Analytics, stated that the causes of the affordable housing shortage were complex, but that Congress should take additional actions to favorably impact price appreciation and supply issues, emphasizing the need for zoning reforms at the local level. 
• What’s next: While not a legislative exercise per se, the hearing served as a backdrop for how the two parties will frame the inflation issue during an election year – and influence the specific legislative proposals they ultimately decide to pursue. 

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

6. 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.

7. Register Today: MBA’s National Advocacy Conference – April 26-27

Registration is now open for MBA’s National Advocacy Conference (NAC) to be held April 26-27 in Washington, D.C. NAC allows you to connect directly with elected officials in our nation’s capital. Your story matters – share it with key policymakers as they consider and pass legislation that affects all of us. 

• Why it matters: The last two years have been unprecedented for millions of Americans, and the real estate finance industry is no different as we navigate new terrains. NAC gives you the opportunity to share your narrative with the key staff and decision-makers while networking with your colleagues from all over the industry. When we work together and combine our voices, we can do great things.  
• What’s next: Share your experiences, your voice, and your passion for our industry April 26-27! Register today at mba.org/nac and take advantage of the early-bird rate before the March 14 deadline.

For more information, please contact Rachel Kelley at (202) 557-2816.

9. 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 recent and upcoming webinars – which are complimentary to MBA members:

• Ukrainian Situation: Cybersecurity Implications for Your Organization – March 18
• MISMO Monthly Webinar: ESG Industry Impacts and MISMO ESG Initiatives – March 24
• Tomorrow’s Servicing: Automated Transfers, Recoverables and Accuracy – March 29
• Special Purpose Credit Programs: The What, the Why, and the How – April 12
• CFPB Enforcement Authority Over Student Loans and Impact on Mortgage Lending – April 21

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.