CREF Policy Update: Scott Turner Confirmed as HUD Secretary
Scott Turner Confirmed as HUD Secretary
Last Wednesday, the full Senate voted to confirm Scott Turner as Secretary of the Department of Housing and Urban Development (HUD). MBA’s President and CEO Bob Broeksmit, CMB, congratulated Secretary Turner in a press statement.
Why it matters: Secretary Turner has said he plans an expansive review of HUD to look for ways to eliminate inefficiencies and to streamline its single-family and multifamily lending programs. He also plans on exploring options for building on federal lands, easing regulations to help lower housing costs, utilizing Opportunity Zones and other tax incentives for affordable housing, prioritizing economic revitalization and financing of commercial real estate, and encouraging state and local governments to do what they can to lower housing costs.
• Per press accounts this week, Secretary Turner is likely to play a role in working with the Treasury Department, the Federal Housing Finance Agency (FHFA), and the Congress on any plan to release Fannie Mae and Freddie Mac (the GSEs) from conservatorship.
What’s next: MBA will continue to work with leadership and staff at HUD on policies and initiatives that improve housing supply and affordability while protecting taxpayers.
For more information, please contact Megan Booth at (202) 557-2740, George Rogers at (202) 557-2797, or Ethan Saxon at (202) 557-2913.
Movement Toward Relaxing CFPB Small Business Reporting Rule
There are reports that the CFPB is not objecting to a temporary stay of the 1071 Small Business Lending Data Collection Rule. The Texas Bankers Association (and others) had challenged the Rule and the case now sits at the 5th Circuit Court of Appeals.
• Citing its recent change in leadership, the CFPB reportedly stated they no longer opposed an earlier motion by the plaintiff trade associations for a stay of the requirements of the Rule.
Go deeper: This week, Rep. Roger Williams (R-TX), Chairman of the House Small Business Committee, introduced a bill to repeal the section of the Dodd-Frank Act that requires financial companies to collect and report small-business lending data to the CFPB. The new legislation, supported by MBA, would both repeal 1071 and do away with data-collection obligations associated with the rule. A Congressional Review Act resolution to rollback the Section 1071 Small Business Data Rule passed Congress in 2023 but was vetoed by President Joe Biden.
Why it matters: Under the rule, lenders who originate at least 100 small business loans in each of the preceding two calendar years are required to report certain demographic information. This requirement was never designed to apply to loans to finance income-producing investment properties, but, despite MBA’s comment letter and lobbying efforts, the CFPB did not include an exemption for this loan category.
What’s next: MBA will continue to advocate for loans on income-producing properties to be exempt from the Rule.
For more information, please contact Megan Booth at (202) 557-2740 or Bill Killmer at (202) 557-2736.
Community Banking and Mortgage Lending Under Scrutiny in House Financial Services Hearing
Last Wednesday, the House Financial Services Committee (HFSC) held a hearing titled, “Make Community Banking Great Again,” which examined community banks’ regulatory challenges and discussed potential legislative solutions. Lawmakers debated proposals aimed at easing regulatory burdens, promoting new bank formation, and reforming the CFPB. A summary of the hearing can be found here.
Why it matters:
• Lawmakers called for reducing compliance costs for community banks, including raising Bank Secrecy Act/Anti-Money Laundering (BSA/AML) reporting thresholds and adjusting CFPB rules affecting smaller lenders.
• Concerns were raised about regulatory barriers limiting community banks’ participation in housing finance, especially multifamily lending. Proposals included easing GSE program access and adjusting regulatory thresholds to expand mortgage credit.
• The CFPB’s Section 1071 rule faced criticism for its potential to raise compliance costs and restrict credit. The 1071 Repeal to Protect Small Business Lending Act was introduced as a countermeasure by Rep. Roger Williams (R-TX) (see more in previous blurb).
• Regulatory uncertainty in commercial real estate was highlighted by Democrats as a challenge for community banks, with direct implications for mortgage lending and housing market stability.
• Despite partisan divides, there was bipartisan agreement on addressing financial fraud and streamlining BSA/AML compliance.
Go deeper: MBA continues to support policies that ensure its community bank members can provide critical mortgage credit – while maintaining strong consumer protections.
What’s next: MBA will remain engaged with HFSC members to advocate for balanced regulatory measures that support community banks and their multifamily lending capacities.
For more information, please contact Bill Killmer at (202) 557-2936, or Madisyn Rhone at (202) 557- 2741.
Federal Reserve Releases 2025 Bank Stress Test Scenarios
Last Wednesday, the Federal Reserve Board released the hypothetical scenarios for its annual stress test, which analyzes large banks’ ability to lend to households and businesses even in a severe recession. The annual stress test evaluates the resilience of large banks by estimating losses, net revenue, and capital levels under scenarios that extend two years into the future.
• Twenty-two banks this year will be tested against a severe global recession with heightened stress in both commercial and residential real estate markets, as well as in corporate debt markets.
• The Fed also reiterated that it will soon take steps to reduce the volatility of stress test results and begin to improve model transparency in the 2025 stress test. A public comment process on its comprehensive changes is expected later this year.
Go deeper: The Fed also released two hypothetical elements designed to probe different risks through its “exploratory analysis” of the banking system. One of the hypothetical elements will examine banks’ reaction to credit and liquidity shocks in the non-bank financial institution sector during a severe global recession. The second hypothetical includes a market shock that hypothesizes the failure of five large hedge funds with reduced global economic activity and higher inflation.
Why it matters: While the Federal Reserve indicated that the exploratory analysis will not affect bank capital requirements, there is some concern that the results could be leveraged in a way that enables Fed supervisors to pressure big banks to keep capital even higher than current requirements. MBA will monitor the results – and any developments – that derive from the “not binding” hypothetical elements.
What’s next: MBA appreciates the Federal Reserve’s plans to increase transparency and reduce volatility in stress test results and looks forward to the reviewing and participating in the next steps on this effort.
For more information, please contact Jamie Woodwell at (202) 557-2936 or Michael Fratantoni at (202) 557- 2935.
MBA Receives Grant from PREA Foundation to Launch Program to Raise Awareness of CRE Career Opportunities
Last week, MBA announced a new partnership with the PREA Foundation that will focus on leading college students into deeper relationships with the commercial real estate finance industry. The partnership will highlight MBA’s and the PREA Foundation’s commitment to fostering inclusive growth in the CRE industry through expanding opportunities to diverse talent.
What they are saying: “Recruiting and retaining talent has been a longstanding priority of MBA, and we are excited to partner with the PREA Foundation to boost talent in the CRE industry,” said MBA’s Broeksmit. “Combining MBA’s experience and infrastructure with the funding and connections of the PREA Foundation will provide individuals from all backgrounds opportunities in the CRE industry.”
Go deeper: Through this new partnership, MBA will receive a $750,000 grant over three years from the PREA Foundation to expand industry outreach and engagement. The initiative will feature in-person and virtual campus events at colleges and universities nationwide while also strengthening on-campus infrastructure to create dedicated spaces for students aspiring to become the next generation of CRE professionals.
For more information, please contact Reggie Booker at (202) 557-2863 or Michael Fratantoni at (202) 557-2935.
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, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:
• Navigating and Ensuring Accurate Reporting with the MBA Commercial and Multifamily Inspection Form – Feb. 26
• The Evolving Role of Document Management in Commercial Real Estate Lending – March 13
• Understanding Parametric Insurance: A Lender’s Guide to Maximizing Protection and Efficiency – April 10
• Uncovering Fraud in Commercial/Multifamily Lender-Placed Insurance – April 15
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.
