MBA Advocacy Update: CFPB Lays Off 1,400 Employees, Court Issues Temporary Injunction
CFPB Lays Off 1,400 Employees, Court Issues Temporary Injunction
Last Thursday, roughly 1,400 employees at the Consumer Financial Protection Bureau (CFPB or the Bureau) received termination notices pursuant to a Reduction-in-Force (RIF) plan.
• The following day (Friday, April 18), D.C. District Court Judge Amy Jackson Berman issued a temporary injunction on the firings, saying she was “deeply concerned, given the scope and speed of the agency action.” The D.C. Circuit Court previously ordered that the Administration could not conduct mass layoffs without conducting individualized assessments of those being fired.
Judge Berman noted: “Within three business days… employees were informed that the agency was planning to do exactly what it was told it couldn’t do on February 14th, exactly what it was told it couldn’t do again [by the circuit court]. Until I have made a determination that it is in compliance… it’s not going to happen in the meantime. We’re not going to disperse 1,408 people into the universe and have them be unable to communicate with the agency anymore until we have determined whether that is lawful or not.”
Go deeper: The scope of layoffs was larger than expected based on recent discussions held by MBA staff with Administration officials. Those conversations suggested that while the Bureau would be downsized, it would maintain sufficient resource levels to conduct core statutory functions, including rule-writing personnel/capabilities needed to revise and reform certain Director Chopra- and Cordray-era rules, as well as sustaining baseline levels of supervision, enforcement, and market monitoring functions required by statute.
Regardless of where CFPB staff reduction levels land, MBA’s discussions with the Administration will emphasize the importance of maintaining sufficient resources to:
• review and revise many mortgage-related rules, such as pending Reg X servicing rules, loan officer compensation rules, and MBA’s RESPA reform recommendations; and
• conducting baseline levels of statutorily required supervision and enforcement across its entire consumer finance portfolio.
What’s next: The next hearing is set for Monday, April 28. MBA will keep members updated as the case continues.
For more information, please contact Justin Wiseman at (202) 557- 2854 or Alisha Sears at (202) 557-2390.
VA Announces VASP Wind Down
On Wednesday, after much anticipation, the Department of Veterans Affairs published Circular 26-25-2, formally announcing the imminent closure of the Veterans Affairs Servicing Purchase Program (VASP) with one week remaining.
As of May 1, 2025, the VA will no longer accept new VASP enrollees—including new VASP Trial Payment Plans (TPPs)—and mortgage servicers must remove the VA Home Retention Waterfall from their loss mitigation programs.
Why it matters: VASP’s eventual wind down has been widely known since early April and concludes a rollercoaster story after only six months as a loss mitigation program/option. Although the VA will allow active TPPs to continue through August 31, 2025, financially distressed veterans are now without a viable foreclosure prevention alternative. Nonetheless, the VA will continue to accept – and expect servicers to complete – the transfer of 18,000+ loans the VA’s contractor has purchased. In the meantime, mortgage servicers must adjust their operations and processes within one week.
Go deeper: It is VA’s position that VASP is a mandatory spending program and that it expects to meet its obligations and purchase all qualified loans successfully submitted and certified. Nonetheless, MBA will continue investigating any risk of servicers not receiving payment after meeting VASP’s final deadlines.
What’s next: MBA will continue to advocate for the swift passage of bipartisan and bicameral Congressional legislation to authorize a partial claim and provide an alternative loss mitigation solution for veterans facing financial hardship.
For more information, please contact Brendan Kelleher at (202) 557 – 2779.
White House Issues Executive Order on Disparate Impact Liability
Yesterday, the White House issued an Executive Order (“EO”) entitled “Restoring Equality of Opportunity and Meritocracy,” instructing federal agencies to stop treating disparate impact as a viable theory of liability in discrimination matters. The Order is in line with the Administration’s moves and rhetoric on Diversity Equity and Inclusion (DEI) and similar initiatives.
Go deeper: Overall, the EO directs all executive departments and agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability,” including but not limited to Title VII.
Additionally, the EO:
• orders the Attorney General, within 30 days of the EO, to report to the President all existing regulations and, sub regulatory guidance that imposes disparate-impact liability detail steps for their amendment or repeal consistent with applicable law. This includes a review of State regulations, that impose disparate impact liability;
• orders the Attorney General and the Chair of the EEOC, within 45 days, to “assess all pending investigations, civil suits, or positions taken in ongoing matters. . . that rely on a theory of disparate-impact liability, and take appropriate action;”
• orders all agencies, within 90 days, to “evaluate existing consent judgments and permanent injunctions that rely on theories of disparate impact liability;
• orders the Attorney General, in coordination with other agencies, to “determine whether any Federal authorities preempt State laws, regulations, policies, or practices that impose disparate-impact liability … and [] take appropriate measures” consistent with the EO;
• orders the Attorney General to repeal or amend regulations contemplating disparate impact liability under Title VI of the Civil Rights Act of 1964, which prohibits race, color, and national origin discrimination in programs and activities receiving federal financial assistance; and
• orders the Attorney General and the Chair of the EEOC to jointly formulate and issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate.
Why it matters: While the EO does not immediately disturb the legal framework created by case law or the relevant statutes, it continues to signal the shifting of enforcement priorities by the federal agencies. The ultimate scope of the EO’s impact remains to be seen, particularly as it relates to the potential for preemption of disparate impact liability under state or local anti-discrimination laws.
What’s next: MBA will continue to monitor these developments and will update members accordingly.
For more information, please contact Justin Wiseman at (202) 557- 2854 or Alisha Sears at (202) 557-2390.
MBA Releases Recommendations on Leveraging Rental Payments to Approve More First-Time Homebuyers
This week MBA published its Leveraging Rental Payment History to Approve More First-Time Homebuyers white paper, covering how to maximize the benefits of positive rent payment history through education, workflow changes, and collaboration with Fannie Mae and Freddie Mac (the GSEs).
Why it matters: The ability to repay is the dominant determining factor in a mortgage approval. A mortgage underwriter’s ability to know a prospective homeowner’s history handling a rent payment can be a strong indicator of a borrower’s ability to sustain a monthly mortgage payment.
Go deeper: MBA’s Affordable Homeownership Advisory Council (AHAC) determined that despite the GSEs’ policy updates allowing the use of positive rent payment history in underwriting, adoption of this flexible option has been limited. To increase lender adoption of positive rent history, the white paper’s recommendations focus on:
• industry practices and improvements to the consumer experience; and
• expanding and enabling broader adoption through GSE collaboration
What’s next: MBA will launch an educational series covering the use of rent payment history and how to optimize workflow and expand adoption. Furthermore, MBA is requesting data from the GSEs to help lenders refine marketing and identify applicants who are most likely to benefit from the collection of rent payment history.
For more information, please contact Anthony Siller at (202) 557-2944.
Maryland Governor Signs Critical Legislation to Exempt Passive Trusts From Licensing
In a significant advocacy victory for MBA and a broad industry coalition, including the Maryland Mortgage Bankers and Brokers Association (MMBBA), Maryland Governor Wes Moore on Tuesday approved legislation (HB-1516/SB-1026) that addresses the Maryland Office of Financial Regulation’s (OFR) January 10, 2025, guidance and emergency regulations stemming from the Estate of Brown v. Ward court ruling requiring the licensing of certain passive trusts.
Why it matters: The OFR’s initial policy interpretation significantly expanded the court’s opinion to also require licensing of mortgage trusts, raising urgent concerns for secondary mortgage market participants. The new law creates the necessary licensing exemptions in state law.
• The sustained industry advocacy included a Mortgage Action Alliance (MAA) call to action for Maryland members to contact their representatives to expedite the consideration and enactment of this legislation.
Go deeper: The legislation was supported by OFR, which extended the enforcement deadline for trust licensing to July 6, 2025, following efforts by an MBA-led coalition in pushing for this legislation. Additionally, an industry coalition submitted a letter to OFR in January, strongly encouraging the rescission of its guidance and regulations.
What’s next: With the enactment of the bill, MBA will continue to seek rescission of the current OFR emergency rule and guidance documents. Because the new law also includes the establishment of a study commission to review the issues related to trust licensing, MBA and MMBBA will now turn to collaborating on conveying the industry’s views to representatives on the Commission once it is established.
For more information, please contact William Kooper at (202) 557-2737 or Justin Wiseman (202) 557-2854.
Get Involved in MAA Action Week: May 12-16
MBA’s annual Mortgage Action Alliance (MAA) Action Week is fast approaching, taking place from May 12-16! Sign up today and promote the importance of advocacy engagement within your company or state association. This industry-wide campaign allows ALL of us to play a part in the legislative and regulatory process – on issues that directly impact all real estate finance professionals. Active MAA engagement allows YOU and your company to drive positive change by adding your voice to our collective efforts.
Go deeper: During MAA Action Week, MBA provides you with all necessary resources you need to make your campaign a success, including a communications plan, sample emails, social posts, and graphics in advance – making it an easy “copy and paste” exercise for you and your designated colleagues.
Why it matters: MAA unites our entire industry. You and your company colleagues are the experts – and your voice is needed to play a part conducting this vital work – especially with so many new elected officials in the current Congress.
What’s next: Join MBA’s Legislative and Political Affairs team for our next MAA Quarterly Webinar: Beyond the First 100 Days on Thursday, May 1, from 3:00-4:00 PM ET. This free virtual event will provide a recap of MBA’s National Advocacy Conference, as well as an update on Congress and the Trump administration, including key regulators, helping to define what it all means for our members. Learn how MBA works with decision makers to support our public policy agenda.
For more information, please contact Jamey Lynch, AMP at (202) 557-2818 or Margie Ehrhardt at (202) 557-2708.
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 – all complimentary to MBA members:
• Key Federal Regulations and Emerging Regulatory Trends for Lead Generation – April 29
• How Local Nonprofits Are Transforming Housing Markets – April 30
• Cybersecurity in Mortgage, Part I: Review of Recent Trends and the Current Landscape – May 6
• Manufactured Housing 101: Understanding the Basics – May 12
• Tech Trends Shaping the Future of Mortgage Lending – May 13
• How to Rapidly Respond to Borrowers with Clear & Empathetic Communications During Natural Disasters – May 20
• Cybersecurity in Mortgage, Part II: Ensuring Your Organization is Prepared and Resilient – May 22
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 at (202) 557-2931.
