CREF Policy Update: President Trump Issues Executive Order on National AI Regulation Standard; Federal Reserve Cuts Rates Again by 25 Basis Points
President Trump Issues Executive Order on National AI Regulation Standard
Last week, President Donald Trump signed an Executive Order (EO) that seeks to prevent a patchwork of state regulations and strengthens American competitiveness.
• Among other items, the EO directs the U.S. Attorney General to establish an AI Litigation Task Force to challenge unconstitutional, preempted, or otherwise unlawful State AI laws “that require AI models to alter their truthful outputs;” directs the Secretary of Commerce to publish an evaluation of State AI laws that conflict with national AI policy priorities; and calls for the development of a national AI legislative framework that would preempt conflicting State AI laws.
• Read the White House fact sheet.
What they’re saying: In a press statement, MBA President and CEO Bob Broeksmit, CMB, said, “MBA welcomes President Trump’s executive order on AI and appreciates the Administration’s focus on establishing a clear, nationally consistent framework for emerging technologies.”
Broeksmit added, “We will work with policymakers on a legislative framework that builds on this executive order to provide durable guardrails, protect consumers, strengthen the mortgage system, and support a competitive marketplace.
Why it matters: MBA supports greater regulatory clarity on how existing laws apply to AI, which would facilitate AI adoption by the mortgage industry, and opposes new laws restricting AI use that are largely duplicative of existing laws that already cover AI decisioning, such as fair lending laws.
What’s next: MBA will keep members informed on pertinent AI news and actions at the federal and state levels. Please see www.mba.org/stateai for more updates on AI policy.
For more information, please contact Gabriel Acosta at (202) 557-2811 or Rick Hill at (202) 557-2718.
Federal Reserve Cuts Rates Again by 25 Basis Points
Last Wednesday, the Federal Reserve for the third time this year cut the federal funds rate, now to a target range of 3.50-3.75%.
Why it matters: The Committee emphasized that it, “…will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
In a press statement, MBA SVP and Chief Economist Mike Fratantoni said, “Inflation is well above the Fed’s target, but the job market appears to be softening, even as data to confirm that trend is still delayed due to the recent government shutdown. Thus, there is ammunition for both sides of the debate within the FOMC. The projections published from this meeting show the Committee does not see a clear path, with members indicating slightly faster growth, but similarly elevated inflation and a fed funds rate path that matches the September projections.”
For more information, please contact Mike Fratantoni at (202) 557-2935.
FSOC Publishes 2025 Annual Report
On Thursday, the Financial Stability Oversight Council (FSOC) published its 2025 Annual Report.
Among numerous items, the report:
• noted that “the CRE sector largely stabilized in 2025 as borrowing costs, vacancy rates, and asset values showed signs of steadying in several property types.”
• highlighted the office sector as being a specific driver behind CMBS delinquencies and further added that the CMBS office loan delinquency rate remains historically high at 11.1%.
• citing estimates, the report also emphasized, “$936 billion of CRE debt is anticipated to mature in 2026, a nearly 19 percent jump from 2025, with a slightly higher amount, $983 billion, due in 2027.”
Why it matters: FSOC was established by the Dodd-Frank Act to identify risks to the financial stability of the United States, promote market discipline, and respond to emerging threats to the stability of the United States’ financial system. FSOC’s report reflects CRE’s role in the broader United States’ economy.
What’s next: MBA will continue to monitor ongoing trends in CRE markets and keep our members updated on issues affecting the CRE industry.
For more information, please contact John Lammle at (202) 557-2789.
HFSC Subcommittee Holds Bank Capital Framework Hearing
Last Thursday, the HFSC’s Subcommittee on Financial Institutions and Monetary Policy held a hearing titled, “Right-Sizing the U.S. Bank Capital Framework: A Return to Tailoring, Economic Growth, and Competitiveness.” MBA submitted a statement for the record, outlining the industry’s concerns with key mortgage-related impacts of the prior Basel III “Endgame” proposal and a broader holistic bank capital review – including concerns related to commercial real estate lending activity by depositories.
• Read a summary of the hearing here.
Why it matters: Lawmakers raised bipartisan concerns about the potential impact of the proposed rule on bank lending, housing finance, and economic growth.
• Several witnesses, including Margaret Tahyar (Davis Polk), Amanda Eversole (Financial Services Forum), Andrew Olmem (Mayer Brown, former White House NEC Deputy Director), and Mike Flood (Chamber of Commerce) emphasized that the proposal could reduce credit availability, particularly for commercial real estate, multifamily housing, and small businesses.
• Witness Simon Johnson (MIT) and Ranking Member Bill Foster (D-IL) raised concerns about AI as a new systemic risk, reinforcing the debate over appropriate capital buffers. A bipartisan group of House lawmakers directly cited concerns related to mortgage lending and housing affordability.
What’s next: Subcommittee members expressed interest in continued oversight and potential legislative responses as key staff at the Federal Reserve, OCC, and FDIC finalize an initial draft of a reworked bank capital proposal. MBA will remain engaged with both regulators and Congress to ensure capital rules more accurately reflect our commercial real estate/mortgage-related priorities.
For more information, please contact Madisyn Rhone at (202) 557-2741, Rachel Kelley at (202) 557-2816, Fran Mordi at (202) 557-2860 or John Lammle at (202) 557-2789.
HFSC Holds Hearing on AI
Last Wednesday, the full House Financial Services Committee held a hearing titled, “From Principles to Policy: Enabling 21st Century AI Innovation in Financial Services.” The hearing spotlighted how AI is reshaping processes within housing and financial services and the potential regulatory frameworks that will govern its use.
Find a full summary of the hearing here and watch the full hearing here.
Why it matters: Committee members on both sides of the aisle debated whether to preempt state AI laws with a single national standard. A harmonized framework could reduce compliance complexity for firms operating across multiple states, while a patchwork of state rules could drive up costs and slow innovation. See first item above on the recent AI EO that addresses this issue.
Go deeper: Members raised concerns about AI perpetuating discrimination in underwriting and tenant screening. Witnesses highlighted AI’s ability to streamline processes like zoning, permitting, fraud detection, and credit evaluation—tools that could lower costs and improve access to housing finance.
What’s next: In addition to engaging on the action items within President Trump’s EO, MBA will continue working with members to prepare for potential new guardrails and civil-rights requirements that could affect multifamily lending, property management practices, and mortgage origination. Regulators are also expected to increase scrutiny of underwriting and pricing algorithms, with a focus on preventing AI-driven bias — measures that could influence how MBA members deploy automated tools across origination and servicing.
For more information, please contact Madisyn Rhone at (202) 557-2741 or Rachel Kelley at (202) 557-2816.
MBA Bank Council Convenes for Final 2025 Quarterly Meeting
On Wednesday, MBA’s Bank Council held its final quarterly meeting for 2025. The Council brings together insured depositories who participate in the CRE-lending space for discussions on current market conditions and policy implications affecting the industry.
• Robert Hansen (S&P Global) provided the Council with a deep dive on the regional banking sector and discussed the sector’s impact on the commercial real estate industry.
• Council leadership hosted a round robin update on market developments in Southern California and New York City in addition to taking questions from attendees on office-specific CRE and state and local policy implications.
• MBA staff provided an overview of research offerings and discussed recent deposit insurance legislation, goings-on at the Federal Reserve, and the expected Basel III re-proposal.
Why it matters: The Council offers a unique forum for industry practitioners to hear from their peers on market developments and trends. The Council also serves as an important venue for practitioners to discuss the impacts of proposed policies and regulatory developments.
What’s next: The MBA CREF Bank Council will continue our quarterly meetings in 2026.
For more information or to become a member, please contact John Lammle at (202) 557-2789.
Upcoming MBA CREF Council and Committee Meetings
MBA’s CREF Councils and Committees are a key way to connect to everything MBA has to offer around policy, advocacy, market intelligence and research, education, and networking. Councils and Committees are built around specific capital sources and serve as an opportunity for you to join other commercial real estate finance professionals to hear from experts, discuss opportunities and challenges, and connect with peers.
Upcoming virtual meetings include:
• Servicer Council: Jan. 15
• Private Credit Council: Jan. 21
• Insurance Company Council: Jan. 22
• All Council In-person Meet-up: February 8
For more information, click on the links above and/or contact Kelli Burke at (202) 557- 2742.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely commercial/multifamily and single-family programming that covers the spectrum of challenges, opportunities, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:
• External CMF Benchmarking Requirements – Jan. 14
• Fundamentals of Commercial Insurance Issues and Problems – Jan. 27
• Internal CMF Benchmarking Requirements – Feb. 18
• Introduction to Commercial Mortgage-Backed Securities – April 8
• Basics of Commercial Loan Closing and Loan Documentation – May 12
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.
