MBA Advocacy Update: Congress Passes Stopgap Funding Bill to Avert Government Shutdown

1. Congress Passes Stopgap Funding Bill to Avert Government Shutdown  

On Saturday night, the U.S. House and Senate passed a Continuing Resolution that averts a government shutdown and extends Fiscal Year 2023 funding through November 17, 2023.

President Biden signed the bill into law before midnight on Saturday, ensuring that all the various government-supported segments of the mortgage market, including HUD (Ginnie Mae and FHA included), USDA, and the VA will continue to operate uninterrupted.

Importantly, the bill also includes $16 billion in disaster aid and an extension of the National Flood Insurance Program (NFIP) until that same date, a provision that MBA has been strongly advocating for on both sides of the Hill and with both political parties.

MBA President and CEO Robert Broeksmit, CMB, noted this is only a short-term resolution and said MBA will remain directly engaged in all the conversations around government funding and the NFIP.

Broeksmit noted that MBA learned late last week that the Biden Administration has identified the Internal Revenue Service’s Income Verification Express Service (IVES) as an “essential” government activity that would continue to operate in the event of a government shutdown.

“As always, MBA stands ready to advocate for its members and their customers during these difficult times,” Broeksmit said.

For more information, please contact Bill Killmer at 202-557-2736, Alden Knowlton at (202) 557-2816, Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.

2. Florida Proposes Rules to Implement Law Banning Real Estate Purchases by Certain Foreign Borrowers

The Division of Community Development of the Florida Department of Commerce (DOC) has published proposed regulations to implement Chapter 2023-33, which went into effect July 1st and prohibited the purchase (or knowing sale) of certain real estate to some foreign principals. The proposed rules are subject to a 21-day comment period and are limited to Section 692.203 of the law, which relates specifically to the purchase of real property near military installations or critical infrastructure. Among the provisions is the establishment of a new web portal for industry and consumers to use in determining where a given property is apropos to military installations and critical infrastructure. It also notes that the DOC will make available a new Foreign Principal Real Property Registration Form, and it will establish a 120-day period for registration of a foreign principal obtaining equitable title to real property by virtue of a contract not expected to close within 90 days of executing the contract. Importantly, the rules would establish a rebuttable presumption of compliance with the law for closing agents and sellers that use state provided affidavits.

• Why it matters: Violations of the law can result in forfeiture of the property, while compliance with the law could have fair housing implications. Because there has been no official compliance guidance from the State of Florida, parties in real estate transaction have relied on forms developed by the state’s industry trade associations. For transactions conducted before the implementation of any rules, lenders should continue to evaluate potential forfeiture and fair lending risks and may wish to consult counsel.
• What’s next: MBA will work with the MBA of Florida to review the proposed regulations and submit comments before the October 11th due date. They will also respond to any forthcoming rulemaking to implement other sections of the new law.

For more information, please contact Liz Facemire (202) 557-2870 or Gabriel Acosta at (202) 557-2811.

3. SEC’s Gensler Testifies Before the House Financial Services Committee

On Wednesday, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler testified during an oversight hearing before the House Financial Services Committee. As expected, Republicans continued to criticize the fast pace of rulemakings at the SEC, as well as the lack of comprehensive economic analysis and how the rules might interact with one another. They were also critical of the SEC’s failure to respond to their numerous information requests. Most Democrats praised Chair Gensler for his work at the SEC and were concerned about the impact of a potential government shutdown on the SEC and market functioning; however, some Democrats expressed concern about the SEC’s approach in certain rulemakings, including open-end fund liquidity, conflicts of interest, custody, and private funds. 

• Why it matters: A bipartisan slate of Members pressed Chair Gensler on the SEC’s proposed rule to prohibit conflicts of interest in certain securitizations and highlighted the risk of the proposed rule’s potential to stifle the efficiency of the securitization market and the crucial role it serves in providing liquidity or prevent various market participants from effectively managing risk. A summary of the hearing can be found here.
• What’s next: MBA will continue its engagement with the Congress and the SEC and monitor developments as the rule moves towards finalization. MBA may also connect with other trades to submit subsequent follow-up letters to further stress concerns.

For more information, please contact Alden Knowlton at (202) 557-2816, Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.

4. Senate Banking Committee Holds Markup of Cannabis Banking Bill

On Wednesday, the Senate Banking Committee voted 14-9 to favorably report out S.2860, the Safe and Fare Enforcement Regulation (SAFER) Banking Act. A summary of the markup can be found here.

• Why it matters: The legislation addresses banking challenges faced by legal cannabis businesses and enables their employees to better document their income when applying for a mortgage.
• What’s next: Majority Leader Chuck Schumer (D-NY) has signaled his intention to bring the bill to the Senate floor alongside other cannabis-related measures.

For more information, please contact Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.

5. 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:

• From Policy to Practice – Fannie and Freddie’s New Radon Sampling Requirements – Oct. 5
• Private Credit Finance 101: A Commercial/Multifamily Overview of Debt Funds and Their Importance in the Capital Stack – Oct. 12
• Using Data Analysis as Part of a Strong Fair Lending Compliance Program – Oct. 24
• Strategies for Serving Millennial and Gen Z Homebuyers – Nov. 2
• CREF Career Conversations – Nov. 9

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.