MBA Advocacy Update July 10, 2023

  1. MBA, Trades Respond to CFPB’s Policy Statement on Abusive Acts or Practices

Last Monday, MBA submitted a joint comment letter with the Bank Policy Institute, U.S. Chamber of Commerce, American Financial Services Association, Consumer Bankers Association, and Credit Union National Association in response to the Consumer Financial Protection Bureau’s (the Bureau) policy statement summarizing past enforcement actions brought under their Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) authority. While MBA believes it is important to clarify the scope and application of the prohibition on abusive practices, the current policy statement falls short of this goal. In particular, the Bureau fails to sufficiently differentiate between an abusive act or practice and an unfair or deceptive act or practice, misstates the threshold for material interference, and does not align the policy statement with the Consumer Financial Protection Act (CFPA) and the Bureau’s prior rulemaking and enforcement history.

-Why it matters: This policy statement is intended to provide the industry with an understanding of how the Bureau views its enforcement authority and which practices it will seek to stop with its UDAAP authority. As noted in the comment letter, MBA believes the statement falls short in providing the clarity needed, and strays from the bounds of the statute.
-What’s next: Though the statement became effective on April 12, 2023, the Bureau may revise it in response to comments. MBA will keep members informed of any updates.

For more information, please contact Justin Wiseman and (202) 557-2854 Gabriel Acosta at (202) 557-2811.

  1. GSEs Release New Repair Guidelines for Condominiums

On Wednesday, Fannie Mae and Freddie Mac (the GSEs) published a Selling Guide Announcement and Selling Bulletin , respectively, adding new guide language regarding purchase requirements for loans in condo buildings that are financially or physically distressed. The updated guidance should help to provide clarity as well as establish definitions related to the GSEs’ temporary structural integrity requirements. The guidance may be implemented immediately but must be implemented for loan applications dated on or after September 18, 2023.

-Why it matters: MBA is engaged with the Federal Housing Finance Agency (FHFA) and the GSEs regarding the temporary structural integrity requirements outlined in Lender Letter 2021-14, stressing that policies created to curb risk related to structural deficiencies need to be targeted and measured to prevent impairing access to credit for this important segment of affordable housing supply.
-What’s next: MBA will continue to call on FHFA and the GSEs to provide a more streamlined risk management process regarding condominium structural integrity. Additionally, MBA is holding its annual Condominium Lending Summit in Washington, D.C. on July 26, 2023, where we will discuss this development and other condo-related policy issues.

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

  1. MBA’s Fratantoni Expects Another Rate Hike Despite Jobs Slowdown in June

The U.S. Bureau of Labor Statistics reported Friday that employment growth slowed in June, with 209,000 jobs added – the lowest monthly gain since a decline in December 2020. The unemployment rate ticked down to 3.6 percent, and annual wage growth was up 4.4%.

-MBA SVP and Chief Economist Mike Fratantoni said, “The incoming economic data has been filled with conflicting signals. Manufacturing activity remains quite weak, while consumer spending has held up somewhat better, and new home construction and sales have picked up. Our forecast is for a slowdown in economic activity in the second half of 2023, with a recovery in early 2024. The June employment report reinforces that forecast. While job growth and wage growth are trending down, both are still well above the pace that would be consistent with the Federal Reserve’s inflation target. We now expect that the FOMC will raise the federal funds target another 25 basis points at its July meeting.”
-What’s next: The next FOMC meeting is scheduled for July 25-26, 2023.

For more information, please contact Mike Fratantoni at (202) 557-2935.

  1. 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:

-Mastering Revenue Metrics of Construction to Permanent Loans – July 18
-Managing Costs and Compliance of Lead Generation in a Purchase Market – July 19
-Office Doldrums: Challenges, Opportunities, and Nuances – July 26
-How to Leverage ChatGPT and Other Generative AI Platforms to Safely Improve Borrower Experiences – July 27
-Budgeting and Financial Planning for Non-Believers – August 22
-C-PACE Financing 101: A Commercial/Multifamily Lender’s Overview – August 23

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.