MBA Advocacy Update–2018 in Review

The past year included a number of significant advocacy accomplishments for MBA and our members spread across a wide range of issues with implications for the mortgage market. These changes are a direct result of industry engagement with Congress, the Administration and individual regulators to ensure our industry has a seat at the public policy table in Washington. As we wrap up 2018 and look to the challenges and opportunities that mid-term political outcomes have created for 2019, your continued engagement is essential to our success.

Our policy successes of the past year would not have been possible without extensive engagement with our members. Through more than 20 committees, forums, networks and working groups, our members helped MBA develop and sharpen our advocacy positions (when engaging in person or via the Mortgage Action Alliance) with legislators, regulators and other policymakers. The breadth and scope of our engagement in 2018–more than 120 calls, webinars and in-person meetings, totaling more than 7,500 member contacts–ensures that MBA’s policy positions serve the entire mortgage industry, without favoring one particular business model over another.

On Capitol Hill, we expect the shift in the political continuum will provide additional opportunities to improve access to mortgage credit that build on the successes of 2018. For example, a long-term reauthorization of the National Flood Insurance Program is still awaiting action. Cybersecurity and consumer data issues will be an area of interest in both chambers. And of course, housing finance reform will continue to be a central focus for members of the Senate Banking Committee, the House Financial Services Committee and the White House and the Federal Housing Finance Agency, as policymakers look to finally address the long-term realignment and role of our secondary mortgage market system.

We are excited about the opportunities ahead, and after a strong year for our industry, we look forward to continued success in 2019. Here’s a summary of some of our key accomplishments in 2018:

Thought Leadership
–Published “Disaster Recovery: A Resource for Homeowners”–a consumer-facing disaster recovery guide available to borrowers, public agencies, non-profits and MBA members for co-branding in English and Spanish.

Legislative/Political Accomplishments
–Testified at House Financial Services Committee hearing on “A Legislative Proposal to Provide for a Sustainable Housing Finance System.”

–Secured enactment of several MBA priorities in Senate Banking Committee’s Regulatory Relief legislation (S.2155, now Public Law 115-174), including MLO transitional licensing, PACE Lending, HMDA and TRID clarifications and HVCRE definition fix.

–Prevented inclusion of an FHA administrative fee in appropriations measures and secured $20 million in direct appropriations for FHA technology upgrades in the Senate-passed THUD Appropriations bill.

–For fifth year in a row, secured prohibition on federal funds being used to facilitate eminent domain seizures of performing mortgage loans.

–Secured introduction of the GUIDE Act (H.R. 5534 and S. 3443) in both chambers of Congress and House Financial Services Committee passage of the legislation that would ensure the Consumer Financial Protection Bureau provides regular written guidance on key rules.

–Achieved bipartisan introduction of the Self-Employed Mortgage Access Act (S. 3401) to permit lenders to use existing income documentation requirements from the GSEs, FHA, VA or USDA to comply with Appendix Q of the Qualified Mortgage standards.

–Secured bicameral introduction and House passage of the Protect Affordable Mortgages for Veterans Act of 2018 (H.R. 6737/ S. 3536) to address the orphaning of existing loans and prevent future problems regarding re-performing loans, loss mitigation activities and cash-out refinances, while doing nothing to weaken important anti-churning protections for Veterans.

–Achieved bicameral introduction of Housing Opportunities Mortgage Expansion Act (H.R. 2890/S. 2361) to allow certain captive insurance companies to restore their FHLB membership.

Regulatory Achievements
–Spearheaded an effort to bring nearly 30 industry and consumer advocacy groups together on an open letter to policymakers, urging them to lock in and expand upon reforms to the GSEs.

–Organized a successful campaign to prohibit FHA from insuring loans with pre-existing PACE liens, reversing a HUD decision from a year earlier.

–Led industry efforts to safeguard veterans against irresponsible lending practices in the form of serial refinances. Continued to work closely with our members, VA, Ginnie Mae and Congress on reforms and technical fixes to better ensure that consumers are protected and investors are confident in the performance of Ginnie Mae securities.

–Worked with FHFA and the GSEs to streamline the seller data requirements in the Uniform Closing Dataset, producing significant cost savings for lenders without reducing the benefits of the data collection.

–Worked to ensure lender readiness for the transition to the GSEs’ Uniform Mortgage-Backed Security by offering a variety of resources through policy committees, conferences and webinars.

–Provided FHFA with detailed, actionable recommendations on the GSEs’ capital standards, credit score requirements and pilot program transparency, as well as FHLB membership criteria.

–Identified numerous areas for improvements in the FHA program, including both technical Handbook changes and broad program-level reforms focused on False Claims Act certainty and technology upgrades.

–Submitted to the federal banking regulators recommendations for a modernized Community Reinvestment Act framework to better reflect the changing nature of the banking industry and the ways in which consumers use banking services.

–Supported efforts to improve access to mortgage credit for borrowers with limited English proficiency, including the development of the FHFA Mortgage Translations Clearinghouse as a resource for lenders and borrowers.

–Raised industry awareness regarding the potential sun setting of the LIBOR benchmark and began organizing efforts to develop best practices in response to the impending transition.

–Conducted a comprehensive member-driven review of default administration regulatory policy to develop actionable items for advocacy and reform in 2019.

–Led industry efforts recommending language to clarify eligibility for pass-through deduction for mortgage lenders.

–Furthered industry advocacy efforts to urge FASB to delay implementation of CECL and conduct a quantitative impact study of CECL implementation.

–Spearheaded industry efforts to obtain final rules that simplify calculation of regulatory capital for small community bank and modify Basel III punitive treatment of MSAs.

Legal Accomplishments
–Furthered efforts to make targeted reforms to the CFPB Loan Originator Compensation Rule by leading coalitions of trade groups and company leaders.

–Advocated for MBA’s CFPB/BCFP reform priorities through 12 comment letters to the Bureau covering all aspects of their operations.

–Secured commitment from CFPB to do “diagnostic” HMDA examinations and refrain from penalties during the first year of implementation.

–Persuaded Bureau to commit to rulemakings to revisit previous HMDA requirements on the privacy policy for publication, the addition of discretionary data points and appropriate transaction coverage.

–Supported our members in reducing TCPA litigation risk in crucial appellate litigation and filed a FCC petition and detailed comments calling for a more common sense regulatory regime.

–Persuaded the CFPB to close the TRID “black hole”

–Prompted key findings in Treasury’s report on the appropriate regulation of FinTechs and non-bank lenders.

–Outlined principles adopted by CFPB in its proposed changes to the No-Action Letter policy and proposed creation of a regulatory sandbox.

State Advocacy Achievements
–MBA successfully ended its five-year campaign for all state regulators to adopt the Uniform State Test during the summer with the addition of West Virginia and Minnesota as UST states.

–Following last year’s release of model legislation to provide the framework for states to permit remote online notarization, laws that adhere to the model’s contours were enacted in Indiana, Michigan, Minnesota, Ohio and Tennessee. Model legislation released by the Uniform Law Commission during November is also substantially similar to the industry’s approach. The model bill was produced in collaboration with the American Land Title Association, and both groups will continue to work together and with their respective state partners to enact the model into law in as many states as possible in 2019.

–To implement state RON laws enacted in 2017, Secretaries of State for Texas and Nevada relied heavily on the approach taken by MISMO’s RON Development Working Group. In addition, the Tennessee Secretary of State proposed rules to implement RON, which are consistent with the MISMO standards. The draft MISMO model standards for policy makers also figured prominently in the work of the National Association of Secretaries of State when they released their approach to implementing RON laws in February.

–The deadline for states to adopt minimum standards for appraisal management companies required by Dodd-Frank and subsequent rules was during 2018. Thanks to the advocacy of MBA and its partner associations, all states are either in compliance, or have expressed their intent to comply as they obtained a one-year extension from the Appraisal Subcommittee of the Federal Financial Institutions Examinations Council.

–Illinois enacted a law this year, with the support of MBA, MAA members and the Illinois MBA, that could serve as a national model to streamline licensing disclosures for state-regulated mortgage companies. MBA has long proposed that states eliminate their divergent requirements for these disclosures and instead rely on the data available to all consumers through the Nationwide Mortgage Licensing System and Registry Consumer Access website.

–In California, Proposition 10 was defeated at the ballot in November. The measure would have repealed state law that currently restricts the scope of rent-control policies that cities and other local jurisdictions may impose on residential property. MBA fought hard to defeat Prop 10, including partnering with the California Mortgage Bankers Association on a webinar and activating MAA’s grassroots network.

–In another collaborative effort between the MBA and the California MBA, in response to a profoundly flawed proposed ballot initiative on consumer data privacy, both organizations worked to get the Federal Housing Finance Agency to weigh in on the potentially disastrous impacts to real estate finance from the language that was to be offered to voters. Ultimately the ballot initiative was withdrawn in favor of a better result offered by the Legislature. As that law does not go into effect until 2020, it will also be subject to additional industry advocacy in 2019.

–MBA submitted a letter to the Conference of State Bank Supervisors in a response to a request for comment on proposed changes to the Mortgage Call Report. MBA expressed its support for making the MCR the unified standard for data disclosure but urged that any changes to the MCR be consistent with current data reporting requirements to limit burden on small- and medium- size companies. The changes to the MCR are a part of larger redesign of NMLS, which attempts to streamline the data disclosure and licensing processes. CSBS has not yet provided a go live date for the changes to the system.

–In response to a request for input on a report required by the New York State Legislature to study the practices, economic impact, and operation of online lending in the state, MBA and the NYMBA submitted a letter asking the New York Department of Financial Services to make clear that their description of online lending does not encapsulate the electronic services lenders use to create greater efficiencies for consumers in the loan process. Absent greater specificity in their definition of online lending it would be easy to confuse online lending with what some lenders are offering in terms of greater levels of in-person electronic and online services to help speed loan origination and loan closing.

Mortgage Action Alliance
–27,000 MAA members–76% increase over 2016
–3,220 downloads of MAA mobile app
–4 companies with more than 1,000 MAA member employees
–2 companies with more than 2,000 MAA member employees
–Nearly 50,000 letters and tweets sent to elected officials; 350% increase over 2016 (Note, this is cycle total)
–Contacted 95% of House & Senate offices on key issues
–4,000 followers on social media

–Raised more than $2.1 million for MORPAC, setting single-cycle and single-year fundraising records in 2018 (with $1.2 million projected in 2018 alone).
–Maintained top-20 trade association PAC status, in both receipts and disbursements (roughly $2.2 million contributed to eligible U.S. House and Senate candidates, with a candidate win rate of 82%).
–571 new MORPAC contributors in 2018, a 70% increase over 2017.