MBA CREF Policy Update Oct. 6, 2022

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

Last week, in a follow-up to a White House meeting, MBA President and CEO Bob Broeksmit, CMB, sent a letter to key Biden Administration officials reiterating MBA’s recommendations on addressing housing supply and affordability challenges across the country. Also last week, House and Senate lawmakers passed a Continuing Resolution ahead of the September 30 government funding deadline to avert a federal shutdown. FHFA also proposed to amend the Agency’s Duty to Serve Underserved Markets regulation to facilitate Fannie Mae and Freddie Mac’s (the Enterprises) activities related to serving colonias.

MBA is now accepting applications for its Commercial/Multifamily Diversity, Equity, & Inclusion (DEI) Leadership Awards. For more information and to apply, click here.

Sign MBA’s Home for All Pledge: Join the 320+ 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. 

MBA Sends Letter to White House on Housing Sustainability and Affordability

Last Wednesday, in a follow-up to last week’s White House meeting, MBA President and CEO Bob Broeksmit, CMB, sent a letter to key Biden administration officials, reiterating MBA’s recommendations on addressing housing supply and affordability challenges across the country.

• Why it matters: In the letter, MBA focused on top multifamily and single-family advocacy priorities, including: increasing the FHA multifamily large loan limit threshold; supporting the GSEs’ proposed multifamily housing goals; enhancing and improving the low-income housing tax credit (LIHTC); supporting a reduction of Federal Housing Administration (FHA) mortgage insurance premiums; reviewing and revising the risk-based capital requirement in Ginnie Mae’s recently finalized capital and liquidity standards; and supporting state programs that have successfully produced affordable rental housing.
• What’s next: MBA remains committed to working with our members, the administration, Congress, and industry stakeholders on safe and responsible policies that increase homeownership and affordable rental housing options for all households.

For more information, please contact Bill Killmer at (202) 557-2736 or Mike Flood at (202) 557-2745.

Congress Passes Stopgap Funding Bill to Avert Government Shutdown 

Last week, House and Senate lawmakers passed a Continuing Resolution (CR) ahead of the September 30 government funding deadline to avert a federal shutdown. The stopgap funding bill extends Fiscal Year (FY) 2022 funding until Friday, December 16, 2022. President Joe Biden will sign the measure into law prior to today’s midnight deadline.

• Why it matters: The stopgap measure keeps agencies – like the U.S. Department of Housing and Urban Development (HUD) – funded at their current levels and extends several expiring authorizations that were addressed in the FY 2022 omnibus appropriations bill, including the National Flood Insurance Program (NFIP).
• What’s next: Negotiations are underway in the House and Senate for a longer-term FY 2023 omnibus funding bill. MBA will provide members with any relevant updates as those discussions continue.

For more information, please contact Alden Knowlton at (202) 557-2741, Borden Hoskins at (202) 557-2712, Ethan Saxon at (202) 557 2913 or Tallman Johnson at (202) 557-2866.

Federal Reserve Requests Comment on a Proposed Policy Statement on Prudent Commercial Real Estate Loan Accommodations and Workouts

On Tuesday, the Federal Reserve Board announced that it had requested comment on a proposed policy statement on commercial real estate loan accommodations and workouts.

• Why it matters: The proposal is identical to the one issued by the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA) last month, which can be found here. The proposed policy statement updates the 2009 guidance on commercial real estate loan accommodations and would apply to all financial institutions supervised by the Board.
• What’s next: MBA will fully analyze the proposal and work with members to provide comments, which are due by November 14, 2022.

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

Federal Reserve Finalizes Supervisory Framework for Insurance Organizations

Last Wednesday, the Federal Reserve Board announced that it had finalized a supervisory framework for insurance organizations overseen by the Board. The final framework is substantially similar to what was proposed in February of this year. 

• Why it matters: The framework provides an approach that is designed to reflect differences between banking and insurance institutions, and the application of supervisory guidance is based specifically on the insurance organization’s risk profile. The framework also strives to minimize supervisory duplication by setting a Board policy to rely as much as possible on the work of other relevant supervisors.
• What’s next: The supervisory framework will become effective 30 days after publication in the Federal Register.

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

Federal Reserve Announces that Six of the Largest Banks Will Participate in a Pilot Climate Scenario Analysis

The Federal Reserve Board announced last week that six of the nation’s largest banks would participate in a pilot climate scenario analysis in an effort to help supervisors and firms measure and manage climate-related financial risks. The participating banks are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. The pilot will begin in early 2023, and there will be no supervisory implications as a result of the exercise.

• Why it matters: The Board will publish lessons learned as a result of the pilot but will not release firm-specific information. While the exercise is exploratory in nature, it does further indicate the Fed’s interest in ensuring banks are properly evaluating and managing climate-related risk.
• What’s next: MBA will monitor the rollout of the pilot and provide any relevant information to members.  

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

Treasury Issues Final Rule Implementing Beneficial Ownership Information Reporting Provisions

Last Thursday, the U.S. Treasury Department issued its final rule establishing a beneficial ownership reporting requirement pursuant to the Corporate Transparency Act (CTA). The final rule requires most corporations and LLCs to report information about individuals who own or control the company. The rule is effective January 1, 2024; however, companies created or registered before this date will have until January 1, 2025, to file their initial reports.

• Why it matters: The rule is a result of years of bipartisan efforts by Congress and other stakeholders and is meant to protect U.S. national security and strengthen the U.S. financial system.
• What’s next: MBA will continue to monitor any additional rulemakings under CTA and report all relevant information to members.

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

FHFA Proposes Amendments to Enterprise Duty to Serve Underserved Markets Rule

FHFA recently proposed to amend the Agency’s Duty to Serve (DTS) Underserved Markets regulation to facilitate Fannie Mae and Freddie Mac’s (the Enterprises) activities related to serving colonias, which are generally defined as high-needs unincorporated communities along the U.S.-Mexico border. In the proposed rule, FHFA would revise its Enterprise DTS Underserved Markets regulation to add a definition of “colonia census tract,” which would serve as a census tract-based proxy for a “colonia,” and amend the definition of “high-needs rural region” in the regulation by substituting “colonia census tract” for “colonia.” The proposed rule would also update the definition of “rural area” in the regulation to include all colonia census tracts regardless of location. These changes would make Enterprise activities in all colonia census tracts eligible for Duty to Serve credit. 

• Why it matters: FHFA remains committed to promoting affordability, equity, and sustainability in the nation’s housing finance markets, especially in underserved communities.  The proposed amendment will help eliminate barriers and allow the Enterprises to better serve people living in colonias.
• What’s next: FHFA will be accepting written public comments on this proposed rule within 60 days of publication in the Federal Register. MBA will be further evaluating the proposed amendments in the coming weeks and will continue to engage with FHFA on this and other critical housing issues.  

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

State Trackers

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

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

MBA Releases New DEI Playbook

MBA recently released a new resource designed to enhance or establish a workplace’s diversity, equity, and inclusion (DEI) framework. This playbook can be utilized to identify a clear strategy tailored to fit a company’s unique needs with checkpoints, guidelines, and detailed descriptions of each employee’s role to hold everyone accountable.

• Why it matters: This new playbook is exclusively available and free to MBA members. Access the playbook here.

For more information, contact MBA’s 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:

• Prioritizing Compliance in Loan and Mortgage Digitization – October 12
• Marijuana and Real Estate in 2022: What Every CRE Professional Should Know – October 19
• Modern Day Redlining in Focus: Takeaways from Trident Mortgage and Beyond – October 20
• Climate Risk in CREF – What we know and are learning – November 1

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

For more information, contact David Upbin at (202) 557-2931.