‘Rise and Thrive:’ Bob Broeksmit, CMB, Opens CREF22
(MBA President & CEO Bob Broeksmit, CMB, welcomes attendees to CREF22 in San Diego on Monday.)
SAN DIEGO—Mortgage Bankers Association President & CEO Bob Broeksmit CMB, opened the MBA 2022 Commercial/Multifamily Finance Convention and Expo with a welcome back—it was the first live CREF Convention since 2020—and a call to action.
“Since we last met, you’ve faced – and weathered – a crisis for the ages,” Broeksmit said. “At the start, there were real concerns that our industry would struggle mightily. Instead, you’ve met this crisis head-on, and in many cases, emerged stronger…While some serious questions and concerns still exist…we’re in a better position than we once thought possible.”
This happened for two reasons, Broeksmit noted. “We wouldn’t be here without your hard work and commitment to your customers and communities,” he said. “And we wouldn’t be here without the tireless efforts of the Mortgage Bankers Association. At every stage of the pandemic, we fought and delivered for you. The MBA excels in times of crisis. We’ve built the infrastructure to make an immediate impact, and forged the relationships to shape the biggest debates. That’s why, time and again, we get results.”
Although the commercial/multifamily sectors have come a long way since the start of the pandemic, Broeksmit cautioned “we’re not out of the woods. There are many pressing questions that all of us are asking:
“Will offices return to normal? It’s a very different question in Manhattan than it is in San Antonio. And different for a large institution than for a smaller shop.
“What will happen to retail? The pandemic’s effects have been waning, but the longer-term evolution of shopping is still underway. Retail is certainly not a sector to be painted with a broad brush.
“Will hotels bounce back? Economy hotels are charging ahead, but business and leisure travel continues to suffer.
“Finally, what will happen with affordable housing? Thanks to lending from many of you, supply is growing — quickly — but demand has continued to outpace it. New policies and programs are needed to ensure that rising generations can rent or buy a home, and many of you in this room have a leading role to play.”
With the midterm elections and a Supreme Court nomination coming up, Broeksmit said major federal legislation is becoming less likely. “That said, we continue to work with both sides of the aisle,” he said. “If there’s another pandemic relief bill, a tax-and-spending bill, or any other measure, we’ll make your needs clear – and make sure a final bill reflects your priorities.
More likely, Broeksmit said, the industry could see a slew of regulations from federal agencies. “Whatever the issue, we’re ahead of the fight,” he said. “We are working to prevent [Consumer Financial Protection Bureau] small business loan reporting rules from applying to commercial lending, and we are urging the CFPB to exempt multifamily loans from HMDA reporting.”
For banks, another round of changes to CRA regulations could loom. “The [Office of the Comptroller of the Currency] rescinded its go-it-alone rule, which had both good and bad changes; now it’s part of a joint effort by the banking agencies. More broadly, federal agencies across Washington, including the banking agencies, the SEC and FHFA, are focused on climate change and financial risk.”
MBA recently responded to the OCC’s proposed principles for Climate-Related Financial Risk Management for Large Banks, and expects the SEC to issue proposed rules this year on climate change and Environmental, Social and Governance disclosures. “Along these lines, we have also established a very active Green Lending Roundtable and have been presenting ESG webinars to keep our commercial and multifamily members up to speed in this emerging area of investor interest,” Broeksmit said.
The industry also has opportunities for additional changes for life company risk-based capital rules, including a possible adjustment to the RBC treatment of delinquent mortgages.
“Our goal is to harmonize that treatment with the reduced capital charge we won on real estate equity investments,” Broeksmit said. “We will also pursue further enhancements to that reduction in capital for real estate investments.”
Looking ahead, Broeksmit said a major opportunity involves affordable housing.
“For the last two years, we have made clear that HUD needs to address the growing delay in the FHA Multifamily loan approval pipeline,” Broeksmit said. “Our message broke through, and last year, HUD hired a new contractor to process loans more quickly. We’re working with HUD to speed things up, and I’m confident we’ll see a difference over the rest of this year.”
Additionally, the White House and Congress share MBA’s desire to expand affordable housing. “We’re working with them on a variety of issues, many of which may bear fruit soon,” Broeksmit said. “Yet progress on this issue requires more than just policy. Our industry can show America the way forward, and in 2022, we will do just that.
“Most of all, I’m positive your businesses will set a new standard for serving your clients and improving society in the year ahead. And I know our industry will continue to rise and thrive.”
