Stevens: ‘Talk is Talk–But It’s Impact that Matters’

DENVER–Mortgage Bankers Association President and CEO David Stevens, CMB, a reflected on a “tumultuous” year that saw him deal with an intense personal health challenge and a rapidly changing political landscape in Washington.

“It wasn’t just my health that made this an unpredictable year, sometimes even tumultuous–and that’s true regardless of what side of the aisle you prefer,” Stevens said here this morning at the MBA Annual Convention & Expo. “But MBA did not let this get in the way. We never have. Our work is too important. So instead, we got to work blazing new trails with a new administration, doing what we always do: building relationships. Providing input. Shaping policy.”

Stevens noted MBA was among the first industry trade groups to pledge to work with the Trump Administration, noting the importance of MBA’s bipartisan approach to Capitol Hill.

“We met with [HUD] Secretary [Ben] Carson and the leaders at HUD, the new teams at Treasury and the White House. And we can see the results,” Stevens said. “On regulatory reform, we brought in a group of non-bank lender CEOs to meet with senior Treasury officials to share our thoughts on the regulatory relief plan. The final document from Treasury was released in early June. It clearly reflected our input.”

On another key topic–Basel III–MBA brought in a group of regional and community bankers to meet with the Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., the Federal Reserve and Treasury to talk about its impact on smaller and regional banks and their ability to retain mortgaging services rights. “And guess what? They suspended the implementation of that aspect of the rule,” Stevens said.

On tax reform, The Administration held two very small meetings on its plans, led by very senior leaders from the White House and the Treasury. “We were invited,” Stevens said. “The list goes on and on, and the same is true for the other side of Pennsylvania Avenue, on Capitol Hill.”

GSE reform maintained a strong focus for MBA over the past year, Stevens said, and MBA has been intimately involved on Capitol Hill. “When the Senate Banking Committee held its first hearing, they invited only three witnesses, he said. “One was a consumer advocate. Another was the GSEs’ former regulator. The third? It was MBA.”

“We remain a leader on every front,” Stevens said. “When it comes to policy, the policymakers in Washington come to us. They rely on our data, our research, our thoughtfulness and our perspective. When Congress pressed Secretary Carson to examine how HUD and [the Department of Justice] were using the False Claims Act to go after FHA lenders, they cited MBA’s advocacy and positions on the subject. Why? Because when MBA speaks, everyone knows that we represent all of mortgage finance, from commercial to residential, from bank to non-bank. Our depth of membership and staff talent is unmatched.”

Talk is talk, Stevens noted–but it’s impact that matters.

“Now, going forward, our voice only becomes more vital,” Stevens said. “Because the new administration will soon be replacing both the directors at [Consumer Financial Protection Bureau] and FHFA. And who is selected will result in significant long term impacts to our industry. It’s more vital because HUD–with its new team, led by Dr. Carson…will be looking at everything, from its broad role in housing to more targeted issues like reps and warrants, loan limits, [mortgage insurance premiums] and credit and counter party policies. It’s more vital because the Treasury and the National Economic Council in the White House will be grappling with everything from tax policies to the role of the federal government in housing finance. And our voice only becomes more vital because, after close to a decade of conservatorship, GSE reform no longer seems like something abstract–something that might or might not happen someday.”

Stevens noted the Trump administration has committed publicly to deal with GSE reform and that MBA must be ready.

“It’s clear that the industry has benefitted by the stability provided throughout conservatorship,” Stevens said. “But still, conservatorship was supposed to be temporary. A stop-gap. And I think we’re all guilty of sometimes forgetting that. Right now, we live with a false sense of security. We are facing the fact that Director [Melvin] Watt’s term ends at the end of next year and who is selected after him could risk the sense of security that far too many live in today. What happens if the President nominates a new director who thinks differently about the government role in mortgage finance and wants to scale it back?”

The answer, Stevens said, is that such a scenario could affect everything from g-fees to loan limits. “Credit policy could change which would impact the QM patch and confidence in the rule as it works today,” he said. “Even the view of protecting the level playing field in pricing may change as there is no permanent protection here. We are risking our business models under a change unless we can lock in the market protections that we depend on today. And that can only be done with legislation.”

MBA has laid out its plan, Stevens said (https://www.mba.org/issues/gse-reform). “It improves the strength of the government guarantee, legislates a level playing field and protects the taxpayer going forward,” he said. “But most importantly it protects against the individual bias of any specific director going forward. This is why we need to do this now. Before we change to a new regime. Congress must act. We need a legislative fix. It’s the only option. Only legislative reform will lock in the gains we have made. But let’s not stop there. We must use our strong, steady voice beyond just GSE reform.”

Tax reform, Stevens added, will have “profound effects” on all MBA members. “We must use our voice to ensure a pro-growth tax code keeping incentives that encourages families and businesses to invest in real estate,” he said. “We must use our unified voice to help the administration enact regulatory reforms that unshackle our members so they can better serve their customers. And we should use our voice, as we always have, to fight for policies that guarantee more affordable and accessible housing that is sustainable.”

Stevens reflected on his speech a year ago in Boston, when he announced his cancer diagnosis. He is now in remission.

“This may not last forever,” Stevens said. “But I feel great–and I’m grateful. I can’t really begin to describe how much it meant to me to see so many of you wearing ‘Stevens Strong’ bracelets. All I can say is that every time I saw one, it occurred to me that it should say, ‘MBA Strong.'”