MBA Advocacy Update May 17, 2021

Bill Killmer bkillmer@mba.org; Pete Mills pmills@mba.org

MBA held its annual National Advocacy Conference this week, the largest advocacy event of the year focused on key issues facing the real estate finance industry. Thank you to all the registrants for getting involved and ensuring your voice was heard during the many “face-to-face” conversations with lawmakers on both sides of the political spectrum.

Also this week, MBA and the National Mortgage Servicing Association submitted comments responding to the CFPB’s proposed rule to amend Regulation X servicing rules in response to the ongoing COVID-19 pandemic. On Wednesday, MBA sent a letter to the House Financial Services Committee ahead of a legislative markup, including two bills that impact our members. And yesterday, the House of Representatives passed H.R. 2547, the Comprehensive Debt Collection Improvement Act.

1. MBA’s National Advocacy Conference Highlights

More than 400 industry advocates from 40 states attended MBA’s virtual NAC this week. The event played host to a slate of congressional speakers, including Senate Banking Committee Chairman and ranking member Sen. Sherrod Brown (D-OH) and ranking member Pat Toomey (R-PA); junior SBC member Raphael Warnock (D-GA); and House Financial Services Committee (HFSC) members Reps. Steve Stivers (R-OH), Anthony Gonzalez (R-OH); and Problem Solvers Caucus Vice Chairman Rep. Dean Phillips (D-MN). There was also a point-counterpoint discussion with former HFSC Chairs Barney Frank (D-MA) and Jeb Hensarling (R-TX).

• Why it matters: This conference presented a critical opportunity for us to hear from – and educate – key congressional leaders and staff about the importance of many urgent and developing issues impacting our members and the economy.    
• What’s next: MBA will remain closely engaged with policymakers in the administration and Congress, and continue to advocate for our industry’s key policy priorities. 

For more information, please contact Alden Knowlton at (202) 557-2816.

2. Senators Introduce SECURE Notarization Act, a Key Ask During MBA’s National Advocacy Conference Hill Day

On Thursday, Sens. Mark Warner (D-VA) and Kevin Cramer (R-ND) introduced S. 1625, the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2021, which would allow notaries in states without enacted Remote Online Notarization laws to perform RON transactions. Like the bill from the previous Congress, the SECURE Notarization Act of 2021 requires tamper-evident technology in electronic notarizations and provides fraud prevention through the use of multifactor authentication for identity proofing and audiovisual recording of the notarial act. The federal legislation would complement existing state laws, while allowing states the flexibility and freedom to implement their own RON standards.

• Why it matters: A direct result of MBA’s advocacy, the bills’ minimum standards for RON are consistent with those provided in the MBA-ALTA model state RON bill and the Mortgage Industry Standards Maintenance Organization RON Standards.
• What’s next: MBA continues to work with congressional allies toward introduction of a companion bill in the House and to advocate with state governments to promote laws that allow the use of RON in a manner that complies with MBA-developed principles.  

For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.

3. MBA Submits Comments to CFPB on Proposed Foreclosure Moratorium

MBA, along with the National Mortgage Servicing Association, on Monday submitted comments responding to the Consumer Financial Protection Bureau’s proposed rule to amend Regulation X and establish a pre-foreclosure review period for borrowers impacted by the COVID-19 pandemic. The letter advocates for clear exemptions to the proposed rule to better assist borrowers who would not benefit from an extended foreclosure moratorium. Additionally, the letter also urges the CFPB to address servicer concerns regarding the reasonable diligence and early intervention requirements.

• Why it matters: The notice of proposed rulemaking effectively extends the foreclosure and eviction moratorium beyond the June 30, 2021, date set by the Federal Housing Administration, U.S. Department of Veterans Affairs, U.S. Department of Agriculture and the GSEs. As proposed, the rule does not provide for exemptions for borrowers who have not responded to servicer outreach or who have been reviewed and do not qualify for home retention options. It will be necessary for servicers to have clear guidance to avoid CFPB scrutiny if the rule is implemented in its current form.
• What’s next: The CFPB will review the public comments and determine the appropriate modifications to the final rule.

For more information, please contact Sara Singhas at (202) 557-2826.

4. House Financial Services Committee Holds Markup 

On Wednesday, the House Financial Services Committee considered several bills, including two in the housing finance space. MBA raised concerns about both bills: H.R. 166, the Fair Lending for All Act, introduced by Rep. Al Green (D-TX); and H.R. 3009, the Improving Language Access in Mortgage Servicing Act, introduced by Rep. Sylvia Garcia (D-TX). MBA’s letter regarding the proposals can be found here.

• Why it matters: Both bills passed along party lines but are likely to see a full House vote in the coming months, given Chairwoman Maxine Waters’ (D-CA) ongoing heavy emphasis on housing policy.
• What’s next: As expressed in the letter, MBA will stay in dialogue with Congress to try and strike the right balance between protecting and serving a host of diverse borrowers while also fostering broad lender participation in the mortgage markets.

For more information, please contact Borden Hoskins at (202) 557-2912 or Alden Knowlton at (202) 557-2816.

5. House Passes Debt Collection Reform Package  

On Thursday, along party lines, the House passed H.R. 2547, the Comprehensive Debt Collection Improvement Act, sponsored by House Financial Services Committee Chairwoman Maxine Waters (D-CA). This legislation includes a provision that would overturn the unanimous U.S. Supreme Court decision in Obduskey v. McCarthy & Holthus LLP. MBA’s letter on H.R. 2547 can be found here.

• Why it matters: The Obduskey ruling upheld that the Federal Debt Collection Practices Act does not apply to non-judicial foreclosure proceedings, a practice used frequently by lenders in states that allow it. MBA filed an amicus brief in the case that influenced the court’s 9-0 decision.
• What’s next: H.R. 2547 will move to the Senate for consideration. MBA has flagged this harmful provision and is advocating for its removal before any additional votes in Congress.     

For more information, please contact Borden Hoskins at (202) 557-2912 or Alden Knowlton at (202) 557-2816.

6. House Panel Holds Key Opening Hearing on Tax Code/Potential Changes

On Wednesday, the House Ways and Means Subcommittee on Select Revenue Measures held a hearing entitled “Funding our Nation’s Priorities: Reforming the Tax Code’s Advantageous Treatment of the Wealthy.” Democrats maintained that the wealth gap in America has been increasing over time and has been exacerbated by the pandemic and low audit rates. On the other side of the dais, Republicans expressed frustration with the prospect of President Joe Biden’s tax proposals that would alter the 2017 Tax Cuts and Jobs Act. Debate during the hearing revolved around potential tax changes such as an increase in the corporate tax rate, increased capital gains tax rates, “stepped-up” basis and the estate tax, and the small-business pass-through deduction (Section 199a/QBI). 

• Why it matters: This hearing, and a series of House and Senate hearings to follow, will set the stage for congressional action on the specific nature, size, and scope of revenue raisers and tax “pay-fors” designed to fund infrastructure priorities.
• What’s next: MBA staff will continue to engage with the administration and key congressional leaders and staff to advocate for the industry’s key tax priorities identified by RESBOG and the MBA Board-approved Tax Task Force.

For more information, please contact Bill Killmer at (202) 557-2736.

7. CSBS Convenes Town Hall to Discuss NMLS Modernization Proposal

On Thursday, the Conference of State Bank Supervisors held a NMLS Modernization Town Hall to discuss its Networked Licensing Model, Requirements Framework, Core Requirements & Identity Verification proposal. The goal of the proposal is to modernize the Nationwide Multistate Licensing System and develop the next generation of supervisory technology to anticipate and accommodate the evolving needs of the state system of financial regulation. 

• Why it matters: The rollout of the modernized system of licensing will begin with the Money Services Businesses industry, and will then be the core system for licensing all industries, including mortgage, debt, and consumer finance. MBA has concerns about how the proposal would affect the mortgage finance industry and its licensing structure. For example, it was not clear from the discussion with state regulators how the modernized approach to licensing would affect a mortgage loan originator’s ability to utilize temporary authority, which is mandated by federal law.
• What’s next: Following the town hall, MBA will hold a second industry taskforce meeting to debrief and discuss the development of a comment letter ahead of the May 31, due date that reflects industry concerns about the modernization proposal.

For more information, please contact Kobie Pruitt at (202) 557-2870.

8. [VIDEO]: mPower Moments: On Building Self-Confidence with Dynex Capital Inc.’s Smriti Popenoe, CFA

In this episode of mPower Moments, MBA COO and mPower Founder Marcia M. Davies sits down for a powerful conversation with Smriti Popenoe, CFA, President and Co-Chief Investment Officer at Dynex Capital Inc. Popenoe shares insights and lessons learned over her incredibly successful career as a leader in capital markets, including building self-confidence and becoming an expert in her field.

• Why it matters: Popenoe also provides advice on building a team and having the self-awareness of “knowing what you don’t know.”
• What’s next: To watch more mPower Moments, click here.

For more information, please contact Marcia Davies at (202) 557-2707.

9. Upcoming MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming webinars – which are complimentary to MBA members:

• Key FDCPA Compliance Issues and Considerations – May 18
• Harnessing and Leveraging Data in Today’s CRE Markets – May 18
• Introduction to Commercial Mortgage-Backed Securities – May 19
• CONVERGENCE: The Future Is Female: How Women Are Shaping the Future of Housing – May 26
• Retail 3.0: Re-envisioning Retail – May 26
• Creating Access to Commercial Real Estate Capital for Underserved Market Participants – June 15
• Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – June 24

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) 557-2890.