CREF Policy Update: May 25, 2023

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

1. MBA Files Amicus Brief in CFSA v. CFPB

Last Monday, MBA filed a joint amicus brief with the Supreme Court in the case, Community Financial Services Association v. Consumer Financial Protection Bureau, where CFSA is questioning the constitutionality of the Bureau’s funding structure. While the brief takes no position on whether the Bureau is constitutionally funded, it urges the Court to avoid ruling in a manner that would disrupt the housing and mortgage markets, harming both consumers and the economy. MBA suggests that, if the Bureau’s funding structure is ruled unconstitutional, the Court should sever those funding provisions and preserve the Bureau’s past actions until Congress corrects the constitutional appropriations problems.

• Why it matters: While there is no immediate impact on the mortgage rules from this decision, MBA decided to get involved because the logic of the decision raised questions about the constitutionality of other CFPB rules and operations.
• What’s next: The Bureau’s appeal of the Fifth Circuit Court of Appeals decision in CFSA v. CFPB will be heard by the Court during its next term, beginning on October 1, 2023. MBA will keep members informed about any updates.

For more information, please contact Justin Wiseman at (202) 557-2845 or Gabriel Acosta at (202) 557-2811.

2. HUD Publishes Preliminary Rule Increasing Energy Efficiency Standards

The Department of Housing and Urban Development released a proposal to increase energy standards on Federal Housing Administration-insured new construction properties to the IECC 2021 standard or ASHRAE 90.1. Only three states to date have implemented IECC 2021, while many others use the IECC 2009 standard.

• Why it matters: FHA’s multifamily program is critical to the production of multifamily units nationwide. This proposal will likely increase constructions costs on these units at a time when costs are already high due to inflation and supply issues.
• What’s next: MBA will work with its member committees to receive input and respond to the public comment period by July 17, 2023.

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

3. Senate Banking Committee Holds Hearing on Recent Bank Failures

Last Thursday, the Senate Banking Committee held a hearing entitled “Oversight of Financial Regulators: Financial Stability, Supervision, & Consumer Protection in the Wake of Recent Bank Failures.” Witnesses included Martin Gruenberg, Chairman, Federal Deposit Insurance Corporation (FDIC) and Michael Barr, Vice Chairman for Supervision, Board of Governors of the Federal Reserve System. A summary of the hearing can be found here.

• Why it Matters: Chairman Gruenberg testified in favor of targeted FDIC coverage of business accounts to increase financial stability. He also said the FDIC is reviewing public comments on the Community Reinvestment Act (CRA) and considering efforts to enhance its effectiveness.
• What’s Next: Options for expanding deposit insurance coverage to cover business accounts in response to the bank failures would require congressional action.

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

4. MBA Issues MAA Call to Action to Oppose Harmful Rent Control Legislation in Nevada

MBA’s Mortgage Action Alliance (MAA) issued a Call to Action last week that urges Nevada MAA members to halt NV SB 371 Rent Control legislation, which would limit Nevada property owners’ ability to assess rent on the open market and effectively restrict their ability to improve or renovate rental units.

• Why it matters: Some state policymakers have embraced the false narrative that rent control is an effective tool to address housing affordability issues within their communities. Instead, it creates a barrier between property owners and tenants while discouraging property owners from maintaining or upgrading their properties. NV SB 371 would remove incentives to develop new affordable housing units, leading to higher housing costs in Nevada’s rental housing market and limiting the number of property transactions.
• What’s next: SB 371 was heard in the Assembly Committee on Government Affairs on Wednesday and will be scheduled for a work session leading to a committee vote. The measure passed the state Senate on April 20, 2023. Go to the Call to Action site to contact your state Assembly members and state Senators today and urge them to stop this proposal before it is considered in committee and/or by the full Assembly.

For more information, please contact Liz Facemire at (202) 557-2870.

5. Sign Up for the 8th Annual MAA Action Week

The Mortgage Action Alliance, MBA’s free grassroots advocacy network, will be holding its eighth annual Action Week on June 12-16, 2023. MAA Action Week is a national, industrywide campaign aimed at growing MAA and activating real estate finance professionals in key states and congressional districts. MAA has over 60,000 active members nationwide in an industry of more than 400,000 employees.

• Why it matters: More than 100 companies participated in last year’s MAA Action Week, generating more than 5,000 new sign ups and 14,500 renewals. Collectively, MAA members have sent over 120,000 emails this year to elected officials supporting Calls to Action to protect our industry. It remains critical that our industry unite to play an active role in shaping legislation and regulations that impact our companies, our customers, and the broader economy.
• What’s next: MBA’s goal is to grow and sustain its active MAA membership to at least 65,000 through company enrollment campaigns. Complete this form for more information and to participate.

For more information, please contact Jennifer Nguyen at (202) 557-2710.

6. 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.

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

7. Upcoming 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 webinars – which are complimentary to MBA members:

• What Trends Will Shape the Lending Space in the Second Half of 2023 – June 1
• Profit & Succeed with Down Payment Assistance Programs – June 8
• Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – June 13
• MSR Transfers: Balancing Risk, Customer Experience and Efficiency – June 15
• How to Leverage Document AI for Unparalleled Efficiency in Loan Production and Loan Servicing – June 27

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.