MBA CREF Policy Update March 9, 2023

March 3, 2023 |By Mike Flood-mflood@mba.org

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

Supreme Court Takes Up Appeal on CFPB’s Funding Mechanism

Last Monday, the Supreme Court said it would consider the Consumer Financial Protection Bureau’s appeal of the Fifth Circuit Court of Appeals decision in CFSA v. CFPB – in connection to its Payday Lending Rule – over the constitutionality of the Bureau’s funding mechanism. The Court said it would hear the case during its next term beginning on October 1, 2023.

Why it matters: This case has potential to significantly impact the regulatory landscape of the mortgage industry. In one of the reasons why the Bureau asked the Court should grant the petition, the Bureau cited MBA’s Amicus Brief in Seila Law to point out the effect this case could have and the resulting disruption in the mortgage industry. A decision upholding the 5th Circuit ruling could create significant regulatory uncertainty for the financial services industry.
What’s next: MBA is working with other industry trades and stakeholders to develop proposed options that would mitigate potential disruptions depending on the outcome of a decision and its possible impact on existing Bureau rules that have been implemented.

For more information, please contact Justin Wiseman at (202) 557-2854 or Alisha Sears at (202) 557-2930.

House Advances Bill to Establish Federal Minimum RON Standards
The full House of Representatives on Monday evening passed H.R. 1059, the SECURE Notarization Act, by voice vote. The MBA-supported measure complements the 42-state remote online notarization (RON) laws by creating a set of minimum federal standards, while allowing individual states the flexibility and freedom to implement their own RON standards. Following the House vote, MBA President and CEO Bob Broeksmit, CMB, issued a press statement supporting the bill’s passage. MBA’s Mortgage Action Alliance (MAA) issued a Call to Action late last week urging members to contact their representatives to voice their support for the bill, with 84% of all House offices contacted ahead of the unanimous/bipartisan vote.

Why it matters: The SECURE Notarization Act has now cleared the full House early in this new session of Congress with the broadest possible bipartisan support, signaling to the Senate there is considerable momentum for the legislation to be considered and debated in the upper chamber.

What’s next: MBA will continue to advocate for the reintroduction of a bipartisan Senate companion SECURE Notarization Act. Once that bill has been formally enrolled, MAA will issue a new Call to Action to urge our members to contact their Senators to voice support for – and urge co-sponsorship of – this parallel legislation.

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

MBA, Industry Trades Sign on to Coalition Letter to Congress on FTC Noncompete Clauses Proposal

On Tuesday, MBA and other trades sent a joint letter to Congress on the FTC’s proposed rule to impose a nationwide ban on almost all noncompete clauses. The U.S. Chamber of Commerce led this letter initiative requesting that Congress use its oversight and appropriations authority to closely examine the FTC’s proposed rulemaking authority. FTC’s proposed rule would ban the use of noncompete clauses in worker contracts, including for paid and unpaid employees, independent contractors, internships, and volunteer contracts. A noncompete clause blocks workers from working for a competing employer or starting a competing business after that person stops working for an employer. The rule would label the use of such clauses as an unfair method of competition for employers towards their workers.

Why it matters: This rule is proposed under the FTC’s rarely used Section 5 rulemaking authority to prevent unfair methods of competition. The novel use of this rulemaking authority may indicate the FTC’s focus on certain business practices and its willingness to stop those practices through rulemaking rather than enforcement.
What’s next: Comments to the FTC’s proposal are due March 20, 2023, and a coalition comment letter to the FTC is currently in the works. MBA will continue to monitor this rulemaking and provide any relevant updates.

For more information, please contact Alisha Sears at (202) 557-2930.

FHFA Announces $545 Million to Support Affordable Housing Programs
On Tuesday, the Federal Housing Finance Agency (FHFA) announced that the Housing Trust Fund (HTF) and Capital Magnet Fund will receive a total of $545 million from Fannie Mae and Freddie Mac (GSEs) for affordable housing initiatives.

The Housing Trust Fund (HTF), through the Department of Housing and Urban Development (HUD), provides grants to states and state-designated agencies to produce and preserve affordable housing for extremely low- and very low-income households. A state must use at least 80 percent of each annual grant for rental housing and the remainder can be used for home ownership and administrative costs. The Capital Magnet Fund awards grants to finance affordable housing and is administered by the Department of Treasury. To be eligible to apply for Capital Magnet funds, the organization must be a certified Community Development Financial Institution (CDFI) or a non-profit focused on affordable housing solutions.

Why it matters: The funds given are an approximate 50 percent decrease over the amounts the GSEs contributed to the programs in 2022. Market conditions in 2022, including higher interest rates, reduced the GSEs’ total new business purchases compared to the previous year.
What’s next: MBA will continue to track news and announcements from FHFA and communicate all relevant information to members.

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

FTC and CFPB Seeks Public Comment on Tenant Background Screenings
On Tuesday, following last month’s White House announcement on tenant protections, the Federal Trade Commission and the CFPB invited public comment on how background screening may shut renters out of housing.

Why it matters: Criminal background checks and eviction records help housing providers protect residents and reduce financial risk to the property. However, inaccurate information hurts prospective renters and landlords alike.
What’s next: MBA will continue to work with the Administration to focus on the biggest issue impacting renters – affordable housing supply – and ways the government can help promote the production of housing.

For more information, please contact Megan Booth at (202) 557-2740.

Data Privacy Takes Center Stage in Two Key House Committees

This week the House Financial Services Committee (HFSC) advanced the Data Privacy Act and, separately, the House Energy and Commerce (E&C) Committee’s Innovation, Data, and Commerce Subcommittee held a hearing focused on data security and data privacy. Both panels are interested in creating a federal standard for data privacy. The HFSC bill is narrowly tailored to Gramm-Leach-Bliley Act reforms, while the E&C Subcommittee is considering a broader approach that would impact financial institutions as well as a host of other industries. MBA submitted a letter on the Data Privacy Act; a summary of the E&C hearing can be found here.

Why it matters: Reforms to the GLBA are critical in determining how MBA members collect, retain, share, and dispose of consumer information as part of their mortgage origination and underwriting activities.
What’s next: Multiple House and Senate committees hold jurisdiction over data-related policies. The E&C Subcommittee is expected to markup its version of data privacy and security legislation in the coming months, which will be followed by debate amongst House Republican leaders about the specific proposal they wish to advance..

For more information, please contact Alden Knowlton at (202) 557-2741 or Borden Hoskins at (202) 557-2712.
Rent Control Map and State Trackers

Given the ongoing proposals and ballot initiatives across the country, MBA has published an online map that provides an overview of state and local rent control laws. MBA will follow ongoing developments on this issue and will update the map accordingly.
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

Upcoming and Recent MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely single-family and commercial/multifamily 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:

Top Commercial Mortgage Servicing Issues in 2023 – March 6
RESPA Advisory Opinion on Comparison Shopping and Lead Generation Platforms – March 7
Responsibly Using AVMs and AI to Automate Appraisal Underwriting – March 8
Conversation with the GSEs: Repurchase Trends and Optimizing Loan Quality – March 8
Achieving Success in Ginnie Mae’s Digital Collateral Program – March 14

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

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

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