MBA Advocacy Update: Senators Include Amendment to Curb Abusive Use of Trigger Leads in Key NDAA Package
Senators Include Amendment to Curb Abusive Use of Trigger Leads in Key NDAA Package
On Thursday, Senate Armed Services Committee (SASC) Chairman Senator Jack Reed (D-RI) and Ranking Member Senator Roger Wicker (R-MS) filed a “manager’s package” of 93 amendments to S. 4638, the SASC-passed National Defense Authorization Act (NDAA) for Fiscal Year 2025. The Reed/Wicker package includes Senate Amendment 2358, which is the text of the Homebuyers Privacy Protection Act, the MBA-supported Hagerty-Reed legislation (S. 3502/H.R. 7297) designed to curb the abusive use of mortgage credit trigger leads.
Why it matters: The manager’s package, S. Amdt. 3290, incorporates all the amendments agreed to on a bipartisan basis by SASC leadership, all relevant committees of jurisdiction (e.g., the Senate Banking Committee), and the full Senate leadership. Including the Hagerty/Reed language in the manager’s package affirms our preferred triggers leads approach will almost certainly be included in the final Senate version of an NDAA – and within ongoing negotiations with the House that will take place through year’s end.
What they’re saying: In a press statement, MBA’s Broeksmit said, “MBA has led a diverse set of coalition partners to help advance needed reforms that would curb trigger lead abuses while preserving their use in appropriately limited circumstances during a real estate transaction,” adding, “MBA will continue to work with lawmakers on both sides of the aisle — including trigger lead reform champions Reps. John Rose (R-TN) and Ritchie Torres (D-NY) – to highlight the importance of preserving this important proposal during the forthcoming Senate debate and eventual NDAA negotiations between House and Senate leaders later this year.”
What’s next: The full Senate must proceed to its floor debate on the NDAA and, ultimately, finalize its version of this “must-pass” bill. The House and Senate will then reconcile their individual versions of an NDAA – including the fate of the Hagerty/Reed language – during negotiations led by the leadership of their respective Armed Services Committees. The House and Senate are likely to vote on a final NDAA agreement after the election.
For more information, please contact: Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.
Federal Reserve Cuts Rates by a Half Point; First Rate Cut Since 2020
Softer inflation data and higher unemployment gave the Federal Reserve enough evidence to cut short-term rates by 50 basis points on Wednesday to a target range of 4.75-5% from 5.25-5.50%.
• The FOMC projections highlighted that inflation is returning to target more quickly than the Committee had expected in June and that the unemployment rate has moved higher and is likely to stay higher than expected.
Read more of Fratantoni’s full commentary here.
For more information, please contact Mike Fratantoni at (202) 557-2935.
Key House Committee Discusses, but Fails to Advance Sweeping Data Privacy Measure
On Wednesday, the full House Energy and Commerce Committee held a legislative “mark-up” on several outstanding bills within its jurisdiction, including a proffered amendment on data privacy – the American Privacy Rights Act of 2024 (APRA).
• The APRA proposal – which is opposed by the House GOP leadership – is principally championed by full Energy & Commerce (E&C) Chair Cathy McMorris-Rodgers (R-WA) and the panel’s Ranking Member Frank Pallone (D-NJ).
• MBA again joined with other major financial services trade associations to criticize the proposal’s failure to adequately recognize the strong privacy and data security standards already in place for the financial sector under the Gramm-Leach Bliley Act (GLBA). During the markup, E&C Ranking Member Pallone offered a modified version of the APRA as an amendment, but then withdrew it given the lack of sufficient support for its approval.
Why it matters: MBA has previously raised additional concerns with APRA, as drafted, regarding the bill’s “private right of action” provision, its insufficient pre-emption of state laws, and its consumer “opt-out” of an evaluation by algorithm for “consequential decisions,” such as housing credit opportunities.
What’s next: MBA will continue to work with our coalition partners to advocate for federal data privacy changes that appropriately protect and acknowledge the primacy of the existing GLBA framework.
For more information, please contact Rachel Kelley at (202) 557 2816 or Madisyn Rhone at (202) 557-2741.
Senate Banking Subcommittee Hearing Frames Tax Reform Debate
On Wednesday, the Economic Policy Subcommittee held a hearing titled, “The Macroeconomic Impacts of Potential Tax Reform in 2025.” Witnesses included Ms. Kitty Richards, Senior Fellow, Groundwork Collaborative, and Ms. Ai-jen Poo, President and Executive Director, National Domestic Workers Alliance, Caring Across Generations.
• Senator Elizabeth Warren (D-MA) chaired the hearing and emphasized the critical nature of the 2025 tax policy decisions. She argued against extending the 2017 tax cuts, stating the Tax Cuts and Jobs Act (TCJA) primarily benefited wealthy individuals and large corporations. Republican Senators did not have remarks at the hearing.
• A transcript of the hearing may be found here.
Why it matters: While the Senate Banking Committee does not have jurisdiction over tax matters, many members of the Banking Committee (including Senator Warren) also serve on the Senate Finance Committee, which will be at the epicenter of tax discussions next year. The points of view expressed in this hearing give a window into the thinking of some Senators for the larger discussion about tax policy that will occur in the 119th Congress (2025-26).
Go deeper: Senator Chris Van Hollen (D-MD) said that the 2017 TCJA tax cuts did not deliver the economic benefits (such as increased business investment and wage growth) promised upon its enactment. He criticized the tax cuts for disproportionately benefiting wealthy executives and shareholders while failing to provide significant relief to average workers.
What’s next: MBA will continue to actively engage on all tax matters in the Senate and the House and continue to strongly advocate for the real estate finance industry’s top tax priorities.
For more information, please contact George Rogers at (202) 557-2797 or Ethan Saxon at (202) 557-2913.
MBA, Joint Trades Respond to FHA’s New Face-to-Face Guidance
Last Friday, MBA joined a coalition of housing trade associations — the American Bankers Association, Housing Policy Council, and National Mortgage Servicing Association – opposing the Federal Housing Administration’s (FHA) latest mortgage servicing Mortgagee Letter, Modernization of Engagement with Borrowers in Default. Together, the trades expressed concern that FHA’s proposed changes to the borrower engagement process would increase complexity and level of difficulty to execute FHA’s new guidance, and thereby increase the associated cost and risk for program participants.
Why it matters: Recently, FHA finalized amendments to their early intervention regulations that removed FHA’s outdated Face-to-Face requirement that required mortgage servicer to conduct in-person meetings with delinquent borrowers. Given advances in technology and electronic communication methods, the draft ML implements FHA’s updated regulation by creating a new Loss Mitigation Consultation process to provide servicers with the flexibility to contact borrowers through alternative methods to discuss information related to their financial hardship. As part of FHA’s new policy, servicers are still required to conduct one consultation per delinquency or make reasonable efforts to do so through two different verifiable attempts to contact the borrowers.
What they’re saying: FHA’s definition of a “verifiable attempt” – to provide a date or timestamp of delivery or efforts to arrange a Consultation — is operationally impractical and provides insufficient guidance for servicers to document compliance. Such a definition thereby creates risk that FHA’s new guidance will be an easy hook to use as a foreclosure defense.
To that end, the trades specifically recommended that FHA’s should:
• Align guidance with existing early intervention requirements;
• Clarify the definition of a verifiable attempt and identify different methods for servicers to document compliance for non-electronic versus electronic communication; and
• Extend the existing regulatory waiver from January 1, 2025, to June 1, 2025, to allow FHA to repropose guidance to the Drafting Table.
For more information, contact Brendan Kelleher at (202) 557-2779.
FHA Drafts New Partial Claim Mortgagee Letter
FHA recently posted a draft ML to the Single-Family Housing Drafting Table for public comment, Partial Claim Recording and Payoff Statements.
Why it matters: The ML would establish a new procedure requiring servicers to obtain partial claim payoff statements from Housing and Urban Development’s (HUD) SMART Integrated Portal (SIP) and provide the statement when they receive a payoff request on an existing FHA-insured mortgage. It also extends the time allowed for mortgagees to record partial claim security instruments from 5 to 15 days.
Going deeper: According to its press release, HUD “is seeking to ensure that borrowers, closing agents, attorneys, and title agents are aware of the partial claim subordinate lien owed by ensuring the partial claim payoff is provided to the party requesting the payoff statement for the FHA-insured first mortgage.” More than one million FHA borrowers have completed a partial claim in recent years. Through better tracking, HUD is seeking to prevent challenges to the subordinate lien ahead of a potential increase in refinances and home sales.
What’s next: MBA’s Loan Administration Committee will submit comments before FHA’s deadline, Thursday, Oct. 10, 2024.
For more information, contact Brendan Kelleher at (202) 557-2779.
MBA Strongly Opposes IMB “CRA Tax” in IL Rules
Last Monday, MBA submitted comments on rules proposed by the Illinois Department of Financial and Professional Regulation (IDFPR) to revise the fee structure for Illinois Community Reinvestment (ILCRA) Exams for independent mortgage banks (IMBs) that are scheduled to commence in 2025.
Go deeper: The new proposal would replace a ILCRA examination fee and replace it with an annual fee on each Illinois licensed IMB based on their total loan volume regardless of whether an actual exam is performed.
• This annual assessment would cost roughly $22,000 a year for the largest IMBs. Payments for 2025 would be required by November 1, 2024 – just six weeks following the closing of the comment period – and fees for following years would be due 30 days after the beginning of the IL fiscal year (July 1).
What they’re saying: In its strong opposition, MBA called the proposal deeply concerning and labeled the switch from a CRA exam fee to an annual assessment as “CRA tax” on IMBs.
Among flaws highlighted by MBA:
• the proposal does not clearly limit the fee formula to Illinois-specific loan volume;
• it provides no business impact nor budgetary plan;
• it is contrary to the statute, which calls for an exam fee, not an annual fee regardless of whether exams are even conducted; and
• it is substantially higher than costs associated with Massachusetts IMB CRA exams (MA is the only other state with a functioning CRA regime for IMBs).
What’s next: IDFPR will now need to provide a second notice in order for it to obtain approval by the Illinois Legislature’s Joint Committee on Administrative Rules. MBA will continue to work with member companies and the ILMBA to oppose the proposal.
For more information, please visit the MBA State CRA Resource Center or contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
NMLS Responds to Comment on Proposed NMLS Fee Increases
Last Monday, the National Multistate Licensing System (NMLS) posted a response to comments submitted on the proposed NMLS fee increase ($5 to $20 increases across license/registration types).
• MBA had previously commented that the proposal lacks the necessary specifics to determine if the suggested fee increases are reasonable because regulators did not explain how the funds generated by the additional costs to the industry would be used.
Go deeper: The MBA letter also made clear that since NMLS serves as a nationwide regulatory system with mandatory compliance, NMLS should be obliged to engage in a budgetary process similar to its federal regulator counterparts and its state regulator members with respect to transparency about its budget and the planned programmatic uses of these increased revenues. The response to comments seeks to address some concerns raised, but did not fully address all questions raised in MBA’s letter.
Why it matters: Real estate finance companies have been, and remain, the largest payor of fees for a system that has significantly expanded to numerous non-mortgage license types. MBA wants to ensure that the expanded NMLS mission is being appropriately funded by the other nonmortgage licensees benefiting today from the many years of mortgage industry investment.
What’s next: The Conference of State Bank Supervisors votes on this proposal in December 2024. If approved, the fee increases will take effect March 2025.
For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
mPower Moments: On Forging Your Own Path with MBA’s Karen Franklin
mPower Founder Marcia M. Davies sits down with Karen Franklin, MBA’s Executive Assistant to the Commercial/Multifamily and Finance teams, for an in-depth conversation on balancing her career at MBA as well as being a professional singer.
Go deeper: Franklin discusses her passion for both careers and acknowledges the obstacles that often come with having two. She also provides helpful tips on how to relax before a big meeting or performance, as well as always believing in yourself to reach your full potential.
For more information, please contact Marcia Davies at (202) 557-2707.
MAA’s Pre-Election Webinar Recap
Last Tuesday, MBA’s Legislative and Political Affairs team hosted a Pre-Election briefing. Participants received an update on the status of the 2024 elections and the industry impact through various electoral outcomes.
• MBA SVP and Chief Lobbyist Bill Killmer discussed the top three key industry issues in Washington, including avoiding a government shutdown, urging Congress to include the bipartisan Homebuyers Privacy Protection Act in the National Defense Authorization Act (NDAA), and advancing programs that increase housing supply and improve housing affordability.
Why it matters: MAA’s Quarterly Webinars cover key advocacy issues impacting the real estate finance industry and allow MAA members to stay current and engage in advocacy year-round.
What’s next: Register for the MAA Post-Election Webinar on Wednesday, December 4 from 3:00-4:00 PM ET and hear Team MBA reflect on the outcomes and impacts of the presidential and congressional elections.
For more information, please contact maa@mba.org or Margie Ehrhardt at (202) 557-2708.
Registration for MBA’s NAC25 Now Open
Attend MBA’s National Advocacy Conference (NAC) on April 8 and 9, 2025, at the Capital Hilton in Washington, D.C. Join hundreds of industry advocates to meet with and educate policymakers on issues impacting your businesses and customers. We make it easy by giving you the tools, training and talking points to let you be a well-informed lobbyist for the day.
Why it matters: With a new Congress comes newly elected officials and opportunities to cultivate relationships for the industry. Your participation at NAC ensures that a newly formed 119th Congress understands how their actions will affect you, your customers, and the communities you (and they) serve.
What’s next: Register today at MBA.ORG/NAC25 and save during the early-bird registration.
For more information, please contact Erin Reilly at (202) 557-2751.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – which are complimentary to MBA members:
• Loss Mitigation & Lessons Learned from Pandemic Era Regulations – Sept. 26
• A Blueprint for Success for Loan Officers Serving Real Estate Offices or Teams – Oct. 2
• Regulation X Redefined: Analyzing the CFPB’s Proposed Loss Mitigation Framework and Language Access Requirements – Oct. 3
• Understanding the CFPB’s Non-Bank Registry – Oct. 16
• Mastering MSR Valuations in a Shifting Marketplace – Nov. 13
• MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For more information, please contact David Upbin or (202) 557-2931.
