MBA Advocacy Update Apr. 18, 2022

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

Last week, MBA responded to the CFPB’s RFI on fees – both in a comment letter and in a joint trades comment letter – imposed by providers of consumer financial products and services. Also last week, MBA sent a letter to FHFA and the GSEs outlining concerns regarding the GSEs’ temporary condominium requirements on deferred maintenance and structural integrity for condo and co-op projects.

FHFA also finalized its Strategic Plan for Fiscal Years 2022-2026, which provides insight into the Agency’s activities and priorities for the coming years.

MBA Responds to CFPB’s Request for Information on Fees 

On Monday, MBA responded to the Consumer Financial Protection Bureau’s Request for Information on fees imposed by providers of consumer financial products and services. To address the Bureau’s concerns with fees, including the Bureau’s belief that certain fees may be hidden from consumers, MBA’s comments outline the extensive statutory and regulatory framework governing fees throughout the mortgage lifecycle. The letter provides a detailed rebuttal to the Bureau’s framing of the issue by highlighting mortgage regulations, including rules developed by the CFPB, which establish “granular and prescriptive disclosure requirements during the mortgage origination process, aggregate limitations on fees included in a mortgage loan’s APR and clear requirements for consumer understanding and the right to correct improper or unnecessary fees[.]” Along with federal law, MBA’s letter identifies additional sources governing fees, including state law and guidelines and servicing requirements imposed by federal agencies and the GSEs.

• Why it matters: By highlighting the extensive body of consumer protection law and contractual requirements currently governing mortgage fees, MBA’s comments make clear that additional policy intervention is not necessary, which is a contention supported by the fact that the Bureau’s own assessments of its rules did not identify concerns like those articulated by the RFI.
• What’s next: The Bureau’s RFI is an information gathering exercise that may, or may not, result in future CFPB rulemaking. MBA’s comment letter stresses that, should the Bureau decide to take action with respect to mortgage fees, it must do so “through a consultative rulemaking process subject to the Administrative Procedures Act.”

For more information, please contact Justin Wiseman at (202) 557-2854 or Blake Chavis at (202) 557-2930.

MBA Leads Trade Associations in Responding to CFPB’s Request for Information on Fees 

On Monday, an MBA-led group of 11 financial services trade associations responded to the CFPB’s Request for Information on fees imposed by providers of consumer financial products and services. Objecting to the Bureau’s suggestion in the RFI that the “consumer financial services market is rife with ‘mandatory or quasi-mandatory’ fees that are not adequately disclosed to consumers[,]” the joint letter outlines the current regulatory landscape, which includes numerous rulemakings requiring robust disclosure of the terms and conditions of consumer financial products, including fees.

• Why it matters: The letter explains that while the CFPB has broad authority “to advance consumers’ understanding of the cost associated with consumer financial products and services[,]” — e.g., creating disclosure requirements – the Bureau’s authority to substantively regulate the level of fees is much more limited based on the authority granted by Congress.  
• What’s next: The trades conclude by explaining that “[i]f, based on such evidence, the CFPB determines that policy intervention may be warranted, it should proceed in a fair and impartial manner, grounded in its authority, and in coordination with other relevant agencies.”

For more information, please contact Justin Wiseman at (202) 557-2854 or Blake Chavis at (202) 557-2930.

MBA Submits Comments on CFPB’s Revised Adjudication Procedures  

Last Friday, MBA and a group of financial services trade associations filed joint comments in response to the CFPB’s new Rules of Practice for Adjudication Proceedings. While the associations’ letter expresses general support for administrative adjudication as a more efficient forum for addressing “routine matters that involve limited legal or factual disputes[,]” the letter argues that the new rules will further concentrate adjudicative power in the CFPB Director. This is unfair because the Director—i.e., the party that authorizes enforcement actions—is not an impartial judge. The joint letter concludes by asking the Bureau to revert to the prior rules and, after “clearly identifying the problems it perceives with the current rules[,]” initiate a “new notice and comment process to develop a more fair and sound adjudicative process with input from stakeholders.”

• Why it matters: The new rules will lead to “outcomes driven by policy rather than impartial application of law to the facts of a case[.]” This creates legal uncertainty as interpretations “swing, often substantially, under the appointees of one administration to the next.”
• What’s next: While the new rules were effective immediately upon their publication on February 22, the Bureau may make changes to the rules based on stakeholder feedback.

For more information, please contact Justin Wiseman at (202) 557-2854 or Blake Chavis at (202) 557-2930.

MBA Comments on GSEs’ Temporary Condominium Requirements Related to Structural Integrity 

On Monday, MBA sent a letter to the Federal Housing Finance Agency, Fannie Mae and Freddie Mac outlining industry concerns with the effects of the GSEs’ recently implemented temporary requirements on deferred maintenance and structural integrity for condominium and cooperative projects. MBA highlighted the market effects of the requirements as well as suggested revisions to lessen the impact of the information collection requirements in the new policy.

• Why it matters: Condominium and cooperative lending has long been a pillar of affordable lending, and MBA expressed concern that the temporary requirements are having a chilling effect on the market. Lenders are struggling to obtain the necessary documentation mandated by the new requirements from condominium associations and management companies. Some condominium associations and management companies, in turn, are discouraging applicants seeking to use GSE-backed loans because the information being asked of them is too broad in scope and too difficult to certify.
• What’s next: MBA is encouraged by the GSEs’ interest in improving the data collection and certifications, and will continue to engage with FHFA, Fannie Mae and Freddie Mac on suggested revisions to this policy and will advocate for a pause in implementation of the requirements until such revisions are finalized.

For more information, please contact Hanna Pitz at (202) 557-2796.

FHFA Finalizes Strategic Plan for Fiscal Years 2022 – 2026

Last week, the Federal Housing Finance Agency finalized its Strategic Plan for Fiscal Years 2022-2026, which provides insight into the Agency’s activities and priorities for the coming years. The final plan largely mirrors the draft released in February and contains the same three overarching goals: securing the regulated entities’ safety and soundness, fostering housing finance markets that promote equitable access to affordable and sustainable housing, and responsibly stewarding FHFA’s infrastructure. Notably, FHFA removed from the plan an explicit request to obtain authority to directly examine nonbank servicers, which MBA raised as a significant concern in comments submitted in March.

• Why it matters: Many of the objectives identified in the Strategic Plan, along with recent reforms to the GSEs, are critical prerequisites in preparing the GSEs to safely and sustainably exit conservatorship at the appropriate time.
• What’s next: MBA will continue to encourage FHFA to permanently implement reforms needed to ensure the regulated entities meet their statutory missions, as well as operate with financial strength and, in the case of the GSEs, appropriate market conduct post-conservatorship.

For more information, please contact Sasha Hewlett at (202) 557-2805.

Three States Enact Remote Work Legislation as National Momentum Continues

Recently, the governors of Kansas, Kentucky and Tennessee signed legislation that will permit mortgage loan originators to work away from a licensed branch location. The advocacy efforts of the MBA of Kentucky and the Tennessee Mortgage Bankers Association were integral in getting legislation (HB 643 & HB 2304) passed in their respective states. MBA staff testified in support of the Kansas bill (HB 2568) in the state’s house and senate chambers.

• Why it matters: The legislation in all three states is generally consistent with the MBA model and other states that have acted to permit remote work. In the past 12 months, 18 states have passed legislation, promulgated rules, or issued regulatory guidance that permanently allow MLOs to work from a remote location.
• What’s next: MBA will continue to work with our state and local association partners to advocate for its model legislation and regulation to create licensing flexibility nationwide.

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

MBA and ALTA Send Support Letter for Maine RON Legislation

On Wednesday, MBA and ALTA sent a letter to Maine Senators in support of legislation (LD2023 ) that would enable the use of remote online notarization (RON) in the state. LD2023 is consistent with the Uniform Law Commission’s (ULC) Revised Uniform Law on Notarial Acts (RULONA) and the MBA state model RON law.

• Why it matters: If enacted, Maine would become the 41st state to adopt RON and would continue the momentum towards having all 50 states enact RON laws.
• What’s next: MBA will continue to work with ALTA and local partners to get LD2023 passed.

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

Register Today: MBA’s National Advocacy Conference – April 26-27

Registration is open for MBA’s National Advocacy Conference held April 26-27 in Washington, D.C. NAC allows you to connect directly with elected officials in our nation’s capital. Your story matters – share it with key policymakers as they consider and pass legislation that affects all of us.

• Why it matters: The last two years have been unprecedented for millions of Americans, and the real estate finance industry is no different as we navigate new terrains. NAC gives you the opportunity to share your narrative with the key staff and decision-makers while networking with your colleagues from all over the industry. When we work together and combine our voices, we can do great things.  
• What’s next: Share your experiences, your voice, and your passion for our industry April 26-27! Register today at mba.org/nac.

For more information, please contact Rachel Kelley at (202) 557-2816.

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:

• Technology Investment: Keeping Pace with Your Peers – April 19
• CFPB Enforcement Authority Over Student Loans and Impact on Mortgage Lending – April 21
• CONVERGENCE: Measuring Housing Affordability in America – April 25
• Introduction to Commercial Mortgage Backed Securities – May 19
• New Fannie Mae and Freddie Mac Condominium and Cooperative Guideline Changes – May 24
• What Trends will Shape the Lending Space in the Second Half of 2022 – June 2

MBA members can register for any of the above events and view recent webinar recordings. For more information, please contact David Upbin at (202) 557-2931.