CREF Policy Update: Federal Banking Agencies’ Basel III Re-proposal Contains Numerous MBA Recommendations
Federal Banking Agencies’ Basel III Re-proposal Contains Numerous MBA Recommendations
Last Thursday, the Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) jointly released the long-anticipated Basel III Endgame re-proposal on bank capital requirements. The three-part proposal (Endgame; G-SIB surcharge; and standardized proposal for regional banks) has a 90-day comment period with a deadline of June 18, 2026.
What they’re saying: In a press statement, MBA President and CEO Bob Broeksmit, CMB, said, “Capital rules are notoriously complex, but based on our initial review, the re-proposal incorporates several priorities long advocated by MBA, including more risk-sensitive capital requirements using loan-to-value ratios and recognition of credit enhancements such as private mortgage insurance. It also takes important steps to reduce the punitive treatment of mortgage servicing rights and commercial real estate loans.”
Go deeper: The re-proposal reflects significant progress for MBA and its single-family and commercial real estate finance members after years of sustained advocacy for a better-calibrated capital framework for mortgage assets after the very flawed initial proposal was released in July 2023.
• MBA’s push for changes came in many forms over the past 2.5 years, including numerous comment letters, regulatory meetings, speeches, and President and CEO Bob Broeksmit’s, CMB, September 2023 testimony in front of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy.
• Ahead of the re-proposal, MBA recently submitted a Statement for the Record supporting the re-proposal (and offering recommendations) ahead of a Senate Banking Committee hearing with the prudential bank regulators, led a broad joint trades letter with recommendations, and sent a letter urging the banking agencies to reduce risk weighting for warehouse lines.
Why it matters: The updated proposal includes several MBA-recommended changes that, if fully adopted, should create a more balanced framework that allows banks and IMBs to compete and serve borrowers more effectively, and help banks participate more fully in commercial real estate financing.
Specifically, the proposal:
• Reduces the punitive capital treatment of mortgage servicing rights by eliminating the cap on mortgage servicing assets (MSAs) in Tier 1 capital and seeking comment on the appropriate risk weight;
• Adopts more granular, LTV-based risk weights for loans held in portfolio;
• Preserves recognition of private mortgage insurance as a credit enhancement; and,
• Takes steps to reduce the punitive capital treatment of commercial real estate loans on banks’ balance sheets.
What’s next: At first glance, MBA is very pleased that the rule proposes policy changes or seeks comment on most of MBA’s recommendations. MBA will share a more comprehensive summary in the near future, looks forward to working with its members to formulate a response ahead of the June 18, 2026, deadline, and stands ready to work with the banking agencies on a finalized Basel III capital framework.
• Register here for the upcoming MBA webinar on March 27 titled, “Basel III Endgame Re-proposal Update.”
For more information and to participate in the Working Group that will meet to comment on this proposal, please contact Pete Mills at (202) 557-2878, Jamie Woodwell at (202) 557-2936, Fran Mordi at (202) 577-2860, and John Lammle at (202) 557-2789.
MBA Issues MAA Call to Action to Address Problematic Build-to-Rent and FHA Multifamily Loan Limit Provisions in 21st Century ROAD to Housing Act
Last week, MBA’s Mortgage Action Alliance (MAA) issued a Call to Action that asks MBA members to urge their U.S. Representative to request House leaders to establish a process to refine and improve last week’s Senate-passed 21st Century ROAD to Housing Act (H.R. 6644).
• Read the bill text here, and a section-by-section here.
Go deeper: MBA has serious concerns about Section 901 of the bill, which would preclude firms owning more than 350 units from purchasing additional units. The section contains carve-outs for certain types of Build-to-Rent (BTR) transactions, with a requirement to dispose of those holdings after seven years, but existing, previously built-to-rent properties are not explicitly excluded. The section’s definition of “single-family home” could potentially be read to include townhomes and other attached units.
Moreover, the Senate’s original ROAD to Housing Act required FHA to study the outdated current multifamily loan limits and report to Congress on both their appropriateness and the adoption of a new inflation adjustment index. It also granted FHA rulemaking authority to adjust those loan limits to better match housing market conditions and costs and enhance affordability pending the results of the study.
• Unfortunately, the current language of the bill’s Section 213 contains drafting errors that would oblige FHA to actually decrease the loan limits to levels below those calculated by HUD staff under current law authorities, thereby negating the underlying purpose of the section as introduced – and as negotiated by the respective House and Senate authorizing committees this year and last.
Why it matters: MBA believes the U.S. House needs to amend Sections 901 and 213, respectively, as follows:
• Add an exemption within Section 901 ‘s BTR requirements for properties that are “purchased as a community of five or more contiguous rental units;” and,
• Correct technical drafting errors regarding FHA multifamily statutory loan limits to fulfill Section 213 of the bill’s original intent.
What’s next: MBA members should take action now to urge their U.S. Representative to push House leaders to refine and improve the bill. Fixes to Sections 901 and 213 are needed to protect rental housing investment and ensure FHA loan limits accurately reflect related construction costs, as intended.
• MBA remains engaged with key House/Senate lawmakers and the Administration – and will continue to press House leaders to make refinements to the remaining problematic provisions as negotiations progress.
For more information, please contact Bill Killmer at (202) 557-2736, Rachel Kelley at (202) 557-2816, George Rogers at (202) 557-2797, and Jeremy Green at (202) 557-2849, or Jamey Lynch at 202-557-2818.
Federal Reserve Keeps Rates Unchanged
The Federal Reserve held the federal funds rate at a target range of 3.50-3.75% last Wednesday.
Why it matters: The Committee noted that, “Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the U.S. economy are uncertain. The Committee is attentive to the risks to both sides of its dual mandate.”
What they are saying: “Ongoing turmoil in the Middle East has significantly increased uncertainty regarding the current and future state of the economy. The spike in oil prices has the potential to both accelerate inflation and weaken economic growth. Amid this uncertainty, the FOMC decided to hold rates steady at its March meeting and reiterated that they are attuned to risks on both sides of their dual mandate to keep the job market strong and prices stable. said Mike Fratantoni, MBA’s SVP and Chief Economist. “The FOMC projections released after this meeting showed that the median member expects higher inflation in 2026. It also showed that little changed with respect to the economic growth outlook, which had been published in December.
Read more of Fratantoni’s commentary here.
For more information, please contact Mike Fratantoni at (202) 557-2935.
Key House Committee Holds Hearing on GLBA Data Privacy Legislation
Last Tuesday, the full House Financial Services Committee held a hearing titled, “Updating America’s Financial Privacy Framework for the 21st Century,” where it considered major updates to Title V of the Gramm‑Leach‑Bliley Act (GLBA).
• Members from both parties expressed strong interest in establishing a single, national financial data privacy standard to replace the growing patchwork of state privacy laws. Witnesses and lawmakers discussed how inconsistent state requirements drive up compliance costs, divert resources from lending and servicing operations, and create uncertainty for regulated financial institutions.
• Watch the hearing here and find a full hearing summary here.
Why it matters: The hearing also examined potential expansions of consumer data rights — such as access, deletion, and data minimization — and how those rights could be integrated into Title V of the GLBA statute without disrupting core functions like fraud prevention, servicing, secondary market execution, anti-money laundering compliance, and record‑retention obligations.
Go deeper: In addition, lawmakers focused on emerging issues that are increasingly important to mortgage market participants, including the transition from “screen scraping” to secure application programming interfaces (APIs) under open banking, the role of AI and automated decision‑making in financial services, and whether a private right of action should be included in any new federal privacy law.
• Taken together, the discussion signals that Congress may pursue bipartisan, structural changes to federal financial privacy law that could potentially affect mortgage origination, servicing, fintech partnerships, and data‑sharing practices — making this hearing an important indicator of possible policy changes ahead.
What’s next: MBA will respond with commentary to the House Financial Services Committee’s working draft text and also work with members of the House Energy & Commerce Committee (which also holds jurisdiction on data privacy and security issues).
For more information, please contact Rachel Kelley at (202) 557-2816.
MBA’s CREF Structured Finance Council Convenes for Winter Meeting
Last Wednesday, the Structured Finance Council convened to discuss shifting market dynamics and regulatory proposals affecting the commercial real estate industry.
Fitch’s Melissa Che spoke to the Council and provided a unique rating agency perspective on surveillance and delinquencies, including broader updates on the macroeconomy and potential risks from geopolitical events throughout the world.
MBA policy staff discussed ongoings in Washington, including reform efforts on the Securities and Exchange Commission’s (SEC) Rule 17g-5 (see more below) and proposed amendments to Exchange Act Rule 15c2-11, ongoing housing legislation, and the Basel III re-proposal.
Why it matters: The Structured Finance Council serves as a venue for industry practitioners to discuss key market developments, trends, and regulatory implications impacting our members’ day-to-day business.
What’s next: MBA will continue to work with members to provide the latest market intelligence and advocate for policies in Washington that will reduce regulatory burden and encourage market participation.
For more information or to join the Council, please contact John Lammle at (202) 557-2789.
SEC Proposes Amendments to Exchange Act Rule 15c2-11
Last Monday, the SEC proposed amendments to Exchange Act Rule 15c2-11, which sets out certain information gathering and review requirements for broker-dealers that publish quotations for, or maintain a continuous quoted market in, securities in the over-the-counter (OTC) market.
• The proposal would clarify regulatory obligations when publishing quotations and affirm that Rule 15c2-11 applies to equity securities.
• In 2021, the Rule was re-interpreted to also include fixed-income securities.
What they’re saying: SEC Chairman Paul Atkins noted, “Regulations should be appropriately tailored to fit the asset class to which they apply.”
Why it matters: Although temporary relief had previously been granted to Rule 144A fixed-income securities, and broker-dealers who provide quotes, MBA views this initial step as a positive development toward lasting regulatory certainty. Regulatory certainty encourages market participation and allows market participants to manage their business more effectively.
What’s next: MBA would like to solicit membership feedback on this issue before deciding whether to submit a comment letter for the record before the May 18, 2026, comment deadline.
For more information or to share your feedback, please contact John Lammle at (202) 557-2789.
Operations Committee Meeting Recap
Last Tuesday, MBA’s Operations Committee gathered for a productive meeting that opened with a Collaboration Corner discussion and a review of meeting expectations, setting a collaborative tone for the session.
Go deeper: The group engaged in an in-depth conversation on Insurance Management and Internal Collaboration, covering key operational topics including escrow management, premium increases, proof of payment, and document collection. The committee also explored technology improvements such as automated emails and communication workflows, as well as production and asset management logistics related to client communication and cash management investor reporting.
Why it matters: For CRE servicers, staying aligned on operational processes is essential to managing complex loan portfolios, meeting investor reporting requirements, and maintaining strong borrower relationships. As the industry continues to evolve, MBA brings servicers together to share best practices, address common challenges, and drive consistency across the servicing community.
• These conversations help ensure that our teams are equipped to handle the day-to-day demands of servicing while remaining responsive to the needs of clients and investors.
For more information and to join this group, please contact Jacky Salazar at (202) 557-2746.
Life Company Servicers Leadership Group Meeting Recap
Last Wednesday, MBA’s Life Company Servicers Leadership Group met for an engaging and collaborative session. The meeting opened with a welcome and introductions, bringing together leaders from across the life company servicing community. The group then moved into dynamic breakout sessions focused on three critical areas: staffing, recruiting, and technology.
• These small group discussions allowed participants to connect with peers, share insights, and explore solutions to shared challenges. The meeting also included an overview of upcoming in-person meeting opportunities.
Why it matters: For life company servicers, navigating the complexities of staffing, recruiting, and rapidly evolving technology is more important than ever. MBA brings this group together to foster peer to peer collaboration, share best practices, and address the unique challenges that come with managing large, complex loan portfolios on behalf of life company investors. These conversations strengthen the servicing community and help leaders stay ahead of industry trends that directly impact their teams and their clients.
For more information and to join this group, please contact Jacky Salazar at (202) 557-2746.
Servicer Council Meeting Recap
Last Thursday, MBA’s Servicer Council met for an informative and engaging session.
• MBA’s Judith Ricks, AVP of Commercial Real Estate Research, provided a market update, focusing on a current look at conditions and trends shaping the commercial real estate servicing landscape. MBA’s Megan Booth, VP of Commercial/Multifamily Policy, then delivered a policy update that highlighted the key legislative and regulatory developments relevant to insurance issues.
• The meeting also featured a thoughtful and timely discussion led by Becky Browning (CBRE), Laura Bushey (Berkadia), and Kathleen Dufraine (JPMorganChase) on lessons learned from the insurance perspective during the recent government shutdown, which offered valuable insights into how servicers navigated the challenges and disruptions that arose last fall.
Why it matters: For CRE servicers, staying informed on market conditions, policy changes, and real-world operational challenges is essential to managing risk and protecting the interests of borrowers and investors alike.
• The government shutdown discussion was a particularly important reminder of how external events can create downstream impacts on insurance, escrow, and overall loan management. MBA plays a vital role in bringing servicers together to share these lessons and ensure the community is better prepared for future disruptions.
What’s next: Members are encouraged to plan for the CRE Servicing Solutions Conference, taking place May 17 through 20, 2026 at the Hilton San Diego Bayfront Hotel.
For more information and to join this group, please contact Jacky Salazar at (202) 557-2746.
Get Ready for NAC: Join Our Prep Webinars
MBA’s National Advocacy Conference is just around the corner, and now is the perfect time to secure your spot. Once you’re registered for the conference, take advantage of our two preparatory webinars designed to help you arrive informed, confident, and ready to advocate effectively on Capitol Hill.
• First-Time Attendee Webinar Wednesday, April 1 | 3:00–4:00 PM (ET) Get a clear overview of what to expect at NAC—from the event schedule to foundational lobbying best practices—and bring your questions for our team of experts.
• Issues Briefing Webinar Thursday, April 2 | 3:00–4:00 PM (ET) Hear the latest updates on key residential and commercial/multifamily policy priorities so you can deliver a strong, informed message during your Hill meetings.
Why it matters: Your voice carries weight. NAC is your opportunity to speak directly with lawmakers about the issues shaping the real estate finance industry. These webinars ensure you’re fully prepared to make the most of those conversations—armed with the latest policy insights and the confidence to advocate effectively.
What’s next: After attending the prep webinars, you’ll receive final event details, meeting schedules, and on‑site guidance to help you navigate NAC with ease. We’ll make sure you’re ready for a productive and impactful experience in Washington.
For more information, visit nac@mba.org or please contact Jamey Lynch at (202) 557-2818 or Erin Reilly at (202) 557-2751.
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:
• Life Company Council: April 9
• FHA Spring Roundtable: April 13-14
• Private Credit Finance: April 23
• Commercial Council: April 29
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:
• Basel III Endgame Re-Proposal Update – March 27
• Introduction to Commercial Mortgage-Backed Securities – April 8
• Basics of Commercial Loan Closing and Loan Documentation – May 12
• HUD’s Role in Multifamily Financing – May 20
• Mastering Commercial Insurance Modeling: Key Insights and Applications – May 21
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.
