MBA Advocacy Update June 26, 2023

  1. MBA-Supported “Trigger Leads” Bill Introduced; Act Today on MBA’s MAA Call to Action

Rep. John Rose (R-TN) recently introduced H.R. 4198, the Protecting Consumers from Abusive Mortgage Leads Act, which would eliminate abusive trigger leads while preserving their use in appropriately limited circumstances – such as communicating with existing customers. Congressman Rose’s bill is a new and separate proposal that differs from H.R. 2656, as introduced by Rep. Ritchie Torres (D-NY) in April, which would issue a blanket ban on trigger leads. Specifically, H.R. 4198 would allow for prescreen reports (trigger leads) to be permissible under the Fair Credit Reporting Act (FCRA) in limited circumstances during a real estate transaction. A consumer reporting agency would not be allowed to furnish a trigger lead to a third party unless that third party certifies having a consumer’s consent or a current relationship with the consumer.

-Why it matters: Eliminating trigger lead abuses while preserving their use in appropriately narrow circumstances (current relationship or consent) is a RESBOG priority, and the introduction of this important bill is directly in response to MBA’s ongoing advocacy efforts. In April, attendees at MBA’s National Advocacy Conference participated in over 260 meetings with individual House and Senate offices and explained to lawmakers the potential consumer harm related to trigger leads and companies that use them to misrepresent themselves, attempt to confuse or deceive recent applicants, or inundate them with phone calls or direct mail.
-What’s next: Your advocacy matters! Participate in MBA’s Mortgage Action Alliance (MAA) Call to Action today and urge your U.S. Representative to co-sponsor H.R. 4198, the MBA-supported “trigger leads” bill. MBA will continue its ongoing dialogue with Congressman Rose – and lawmakers on both sides of the aisle – to explore legislative reforms to stop the unwanted harassment of consumers, while maintaining an efficiently-functioning market.

For more information, please contact Borden Hoskins at (202) 557-2712, Alden Knowlton at (202) 557-2741 or Bill Killmer at (202) 557-2736.

  1. Bipartisan Flood Insurance Legislation Introduced

Last week, Senators Bob Menendez (D-NJ) and Bill Cassidy (R-LA) introduced legislation to reauthorize the National Flood Insurance Program (NFIP) and limit recent premium increases. The National Flood Insurance Program Reauthorization (NFIP-RE) Act of 2023 has a House companion offered by Reps Frank Pallone (D-NJ) and Clay Higgins (R-LA). The text of the legislation can be found here.

-Why it matters: The legislation updates the claims process, caps annual premium increases at 9 percent – down from 18 percent – and provides funding for mitigation and vouchers to boost flood insurance affordability for low- and middle-income homeowners.
-What’s next: Congress has enacted 25 short-term reauthorizations of the NFIP since its last five-year renewal lapsed in 2017. The current reauthorization will expire September 30, 2023.

For more information, please contact Bill Killmer at (202) 557-2736 or Ethan Saxon at (202) 557-2913.

  1. House Passes GSE Pricing Bill

On Friday, the full U.S. House of Representatives passed H.R. 3564, the Middle-Class Borrower Protection Act of 2023. The legislation was introduced by Representative Warren Davidson (R-OH) following the implementation of Federal Housing Finance Agency’s (FHFA) revised GSE pricing grid on May 1, 2023. MBA’s letter to congressional leaders regarding H.R. 3564 (delivered prior to the floor vote this morning) can be found here.

-Why it matters: The bill, if enacted, would rescind the most recent FHFA changes to the revised grid, institute a freeze on any additional loan-level price adjustments (LLPAs) until the Government Accountability Office (GAO) has issued a report on the recent changes, prohibit FHFA from using a debt-to-income (DTI) ratio calculation in any future LLPAs, and require any future LLPAs to adhere to a “risk-based pricing” structure (as closely as possible). Due to the official Congressional Budget Office scoring of the bill, a “Manager’s Amendment” to the bill imposed a funding offset that would extend by one year the 10-basis point increase of the Fannie Mae and Freddie Mac “g-fees” that were codified in the Infrastructure Investment and Jobs Act (P.L. 117-58). As we have historically, MBA (and other leading real estate groups) opposed this g-fee “pay-for.”
-What’s next: The full House passed the measure by a vote of 230-189. Senate action on the bill is unlikely. MBA will continue its engagement with FHFA, lawmakers, and industry stakeholders to ensure clarity and transparency regarding the GSEs’ pricing framework.

For more information, please contact Alden Knowlton at (202) 557-2741 or Borden Hoskins at (202) 557-2712.

  1. NMLS Announces Forthcoming Updates to Mortgage Call Report

Last Tuesday, the National Mortgage Licensing System (NMLS) announced that state regulators will implement Form Version 6 of the Mortgage Call Report (MCR) on April 1, 2024. The new version is required for MCRs covering the first quarter of 2024 and later. The announcement notes that the key updates will include: the elimination of standard and expanded forms; the use of business activities on the company form to auto-fill irrelevant sections with zeros; alignment of definitions and instructions to focus on residential mortgage lending only and to allow for more data quality checks; and, the addition of a Supplemental State-Specific Form to capture commercial mortgage and consumer lending data for states that need that information from their mortgage licensees. Questions regarding these updates can be sent to the MCR mailbox: .

-Why it matters: Companies that hold a state license or state registration through the NMLS are required to complete a quarterly MCR. Further, Fannie Mae and Freddie Mac Seller/Servicers or Ginnie Mae Issuers must submit an Expanded MCR.
-What’s next: MBA will work with state regulators and their professional associations to provide member companies more information and opportunities to ask questions about this implementation.

For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.

  1. Federal Reserve Chair Testifies in House and Senate

Federal Reserve Chair Jerome Powell testified before the House Financial Services Committee and Senate Banking Committee this week as part of his semi-annual report to Congress. Chair Powell discussed the Federal Open Markets Committee’s (FOMC) justification for holding interest rates steady at its most recent meeting – quickly dismissing the decision’s characterization as a “pause” – and signaled that additional rate hikes are likely this year. Chair Powell faced numerous questions from both sides of the aisle over concerns regarding Fed Vice Chair for Supervision Michael Barr’s anticipated recommendation to increase capital requirements at the conclusion of a “holistic review.” A summary of both hearings can be found here.

-Why it matters: Republicans mainly focused their questions on Vice Chair Barr’s review of bank capital requirements, the impact of higher capital requirements, and the Fed’s process for changing capital requirements. Democrats mainly focused their questions on how monetary policy can impact low and moderate-income communities, inflation in other jurisdictions, diversity at the Fed, and climate policy.
-What’s next: The Federal Reserve will outline plans to overhaul capital and liquidity rules later this summer, which would initiate an ambitious rule rewriting process for banking regulators. A significant increase in bank capital standards could impair credit availability across a wide variety of asset classes and lines of business impacting housing finance, including mortgages, servicing rights, warehouse lines, and MSR financing. MBA will review the proposals and will focus our comments on these concerns.

For more information, please contact Alden Knowlton at (202) 557-274, Borden Hoskins at (202) 557-2712, Ethan Saxon at (202) 557-2913 or Bill Killmer at (202) 557-2736.

  1. Texas Enacts Broad Data Privacy Bill

Texas Governor Greg Abbott recently signed HB 4, the Texas Data Privacy and Security Act. Texas is now the 10th state to enact broad data privacy laws. Importantly, the bill exempts financial institutions and data subject to the federal privacy guidelines in the Gramm-Leach-Bliley Act (GLBA). A majority of the law will take effect July 1, 2024.

-Why it matters: By including the GLBA provision, the Texas bill helps ensure the industry can continue to process information pursuant to existing federal data protection guidelines. Without a national standard, the cost of compliance for state-by-state patchwork increases costs ultimately for consumers and may lead to lower competition in the market.
-What’s next: Since 2018, broad data privacy legislation has been gaining traction across states and this trend is expected to gain momentum. It is important for member companies and state and local association partners to continue to coordinate with MBA to help educate policymakers on the importance of the GLBA exemption to our industry. For more information, please visit MBA’s State Data Protection resource center.

For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.

  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:

-How to Leverage Document AI for Unparalleled Efficiency in Loan Production and Loan Servicing – June 27
-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
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.