MBA Advocacy Update: Warsh, Vought Hill Hearings Recap; FHFA Proposed Amendment to SCP Regulation; MBA’s VA Recommendations to Modernize Handbook; more
After initial efforts to advance a broad veterans’ benefits package proved surprisingly difficult on Thursday, House GOP leaders indefinitely postponed debate on that bill’s (H.R. 9237) final passage. As currently drafted, the proposal’s benefits’ expansion would be offset (in part) by increased Home Loan program refinance and loan assumption fees. MBA will continue to urge Congress to look for alternative offsets – and keep you posted on next steps in both the House and Senate – in the coming weeks.
Fed Chair Warsh Testifies on Monetary Policy, Housing Finance, and Basel Capital Standards
Last week, the House Financial Services Committee and Senate Banking Committee held their semiannual hearings on the Federal Reserve’s Monetary Policy Report, where Fed Chair Kevin Warsh faced questions from lawmakers on the economic outlook, inflation, interest rates, and the housing market.
- Housing affordability took center stage as Rep. Pete Sessions (R-TX) and Rep. Joyce Beatty (D-OH) pressed Warsh on elevated mortgage rates and foreclosure risks facing first-time and financially vulnerable homebuyers.
- A summary of the respective House and Senate hearings can be found here and here.
Go deeper: Rep. Young Kim (R-CA) and Rep. Brad Sherman (D-CA) questioned a proposed 100% risk weight on affordable housing investments under the Basel III re-proposal that is currently set to be finalized later this year (or early next). In the Senate, Chairman Tim Scott (R-SC) tied capital rules directly to mortgage access, and Warsh reaffirmed that “the Basel Endgame is not America’s endgame.”
Why it matters: Warsh tied mortgage affordability to the Fed’s price stability mandate while signaling a cautious, US-tailored approach to bank capital standards.
What’s next: MBA will continue monitoring Fed policy and its implications for mortgage rates, capital standards, and financial regulation.
For more information, please contact Rachel Kelley at (202) 557-2816, Madisyn Rhone at (202) 557-2741, George Rogers at 202-557-2797 or Jeremy Green at 202-557-2849.
CFPB Acting Director Vought Testifies Before House and Senate, Endorses Structural Reform
Last week, the House Financial Services Committee and Senate Banking Committee held their semiannual oversight hearings on the Consumer Financial Protection Bureau (CFPB), where Acting Director Russell Vought defended the Bureau’s direction under the Trump administration and endorsed major structural reforms.
- Lawmakers also questioned Vought on the Bureau’s recent policy changes affecting consumers and the mortgage market.
Go deeper: Vought endorsed several key provisions of the House Republicans’ draft CFPB Reform Act proposal, calling actions to tie the Bureau’s funding to the congressional appropriations process “the most important reform that you can do, full stop” in response to questioning from Rep. Andy Barr (R-KY). He also expressed support for requiring more robust regulatory-related cost-benefit analyses and establishing an independent CFPB inspector general, while praising President Trump’s recent nominee to lead the Bureau, Brian Johnson.
Why it matters: The CFPB’s future structure, leadership, and regulatory agenda/posture carry direct implications for MBA members’ compliance certainty.
- As noted last week, all of MBA’s recommended priorities for implementing the President’s Executive Order on “Promoting Access to Mortgage Credit” are now slated for potential CFPB action, including reforms to the Regulation X servicing rule, Loan Officer Compensation, ATR/QM, and TRID.
What’s next: MBA will stay actively engaged on discussions regarding proposed CFPB structural reforms and the Senate confirmation process for a permanent director.
For more information, please contact Rachel Kelley at (202) 557-2816, Madisyn Rhone at (202) 557-2741, George Rogers at 202-557-2797 or Jeremy Green at 202-557-2849.
FHFA Proposes Amendment to Suspended Counterparty Program Rule
Last Monday, the Federal Housing Finance Agency (FHFA) proposed an amendment to the existing Suspended Counterparty Program (SCP) regulation, with an effort to remove the term “reputational harm.”
- The SCP regulation has been through multiple re-proposals over the last few years. In September 2024, FHFA announced a re-proposal of the amendments to the SCP regulation, which addressed MBA’s significant concerns with the original July 2023 proposal. This re-proposal was subsequently withdrawn, and FHFA now aims to amend the existing regulation to eliminate redundancy and affirm that FHFA’s supervision of counterparty risk is based on material and measurable risks.
Why it matters: MBA has long viewed suspension as a remedy that should be reserved for the most serious transgressions and is pleased that FHFA continues to improve the regulation. MBA’s 2023 letter commended FHFA’s more narrowly tailored proposal and urged FHFA to finalize the rule with one important revision to the definition of “covered misconduct” to further ensure that counterparties are not at risk for routine certifications.
What’s next: FHFA will accept public comments through August 12, 2026. MBA will review the proposal and consult with members to determine whether to submit comments.
For more information, please contact Justin Wiseman at (202) 557-2854 or Alisha Sears at (202) 557-2930.
MBA Submits Recommendations to Modernize the VA Lenders Handbook
Last Wednesday, MBA submitted recommendations to the Department of Veterans Affairs (VA) aimed at modernizing the VA Lenders Handbook (Pamphlet 26-7) and improving program clarity for lenders and veteran borrowers.
- The recommendations focus on three key areas: incorporating active Circulars into the Handbook, creating a single searchable and fully navigable handbook similar to the Federal Housing Administration’s (FHA) and Department of Agriculture’s (USDA), and prioritizing updates to high-impact chapters, including Minimum Property Requirements (MPRs) and Interest Rate Reduction Refinance Loans (IRRRLs).
Why this matters: Maintaining a current and comprehensive handbook promotes consistent program administration, reduces compliance risk, and improves the delivery of VA home loans to veterans.
What is next: MBA will continue working with the VA to advance these recommendations and support efforts to improve the efficiency and competitiveness of the VA Home Loan Guaranty Program.
For more information, please contact Darnell Peterson at (202) 557-2922.
MBA, CMLA Submit Joint Comments to Pre-Rulemaking Request on Colorado ADMT Act
On Monday, MBA and Colorado Mortgage Lenders Association (CMLA) submitted a joint letter in response to the Colorado Attorney General’s pre-rulemaking request for comments on the Automated Decision Making-Technology Act (SB26-189) (ADMT Act).
- SB26-189 repealed and replaced the 2024 law that emphasized documentation and risk assessments.
- This new law focuses on consumer pre- and post-decision disclosures, removes the risk assessments and mandatory governance programs, and only requires a manual review (without AI) when it is “commercially reasonable”.
Why it matters: The opportunity to comment during the pre-rulemaking phase is critical, as the law’s ultimate impact will largely depend on the regulations that follow. These comments will help inform the Colorado Attorney General’s Office on the direction of those regulations and the practical considerations necessary for workable industry compliance.
Go deeper: The joint letter urged the CO AG to ensure that deployers of AI decisioning do not need to send separate Colorado disclosures that would duplicate those required under Equal Credit Opportunity Act (ECOA) or Fair Credit Reporting Act (FCRA). The associations also asked for clear guidance for what constitutes meaningful human review, including an explanation of when providing meaningful human review is not commercially feasible.
- The letter also asked the CO AG to provide a model pre-decision notice (and a safe harbor for its use) and create a strict distinction between developers and deployers and avoid situations where a deployer becomes a developer by providing feedback to a model’s development.
What’s next: MBA and CMLA will continue to track and engage in the rulemaking process and keep members informed throughout the process.
For more information, please visit the MBA resource center mba.org/stateai or contact Liz Facemire, CMB (202) 557-2870 or Gabriel Acosta (202) 557-2811.
MISMO Updates Mortgage Insurance Guidance to Utilize New Credit Models
MISMO recently released updated guidance for its Mortgage Insurance Implementation Guide, adding data requirements to support VantageScore 4.0 and FICO 10T adoption while providing a standardized framework for exchanging mortgage insurance data across key processes, including rate quotes, commitments, contract underwriting, document delivery, and mortgage insurance (MI) order responses.
Why it matters: Standardized data exchange improves system integration, increases efficiency, supports modern credit scoring models, and provides lenders and mortgage insurers with more complete and consistent data. The MISMO guide also supports MBA’s advocacy efforts to expedite implementation of the modernized credit scores for all market participants.
What’s next: MISMO encourages lenders and technology providers to coordinate implementation efforts with their MI providers and begin planning adoption of the updated guidance.
For more information, please contact Perry Williams at (202) 557-2809.
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:
- UAD 3.6 Office Hours Part II – July 20
- Analyzing the 2025 Mortgage Market: A Deep Dive into New HMDA Data – July 22
- The Black Line of Revenue: Building a Pipeline That Holds When the Market Shifts – July 27
- How Lenders Can Create More Homes – and Build Their Business – July 28
- Expanding Investor Opportunities Through Cash Flow Lending – Aug. 4
- Driving Performance in Non-Agency Servicing – Aug. 5
- Vetting Closing Agents and Real Estate Attorneys to Mitigate Risk – Aug. 6
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.
