Bob Broeksmit on MBA Advocacy, Priorities in New Administration
(Image by Anneliese Mahoney)
WASHINGTON–“In this whirlwind of dramatic change–whether a slew of executive orders or landmark legislation coming down the road, MBA is not hanging back and waiting to see how this will play out,” said Mortgage Bankers Association President and CEO Bob Broeksmit, CMB, at the MBA National Advocacy Conference April 8.
Broeksmit emphasized the need for MBA members to get involved in those advocacy efforts.
“You are the voters. You are the people who will determine whether this elected representative remains in office or leaves office,” said Broeksmit. “They want to hear from you. You employ people in the district and you make financing possible for so many people in their home state. It’s always the case when I accompany you on these visits that they’re polite to me, but they’re really engaged with you.”
Broeksmit noted that MBA is always working hard behind the scenes by building trust and providing resources–or objections and concerns, when necessary–to lawmakers, among other efforts.
Among a recent success for MBA advocacy efforts is that in February the Trump Administration waived the implementation of the single-family floodplain rule, which would have required newly constructed structures located within a 100-year floodplain to be built at least two feet above the Base Flood Elevation. Broeksmit cautioned that was an “absurdly expensive proposition” pretty much everywhere.
Broeksmit did say, however, that the industry must continue to push for a full recission and reversal of the rule, as well as an immediate waiver for the multifamily application of the floodplain rule.
Another win: the Administration delayed by six months new energy standards that would have required new construction with Federal Housing Administration or U.S. Department of Agriculture financing to use building codes that most states haven’t yet adopted, adding thousands of dollars to the cost per unit. That’s also a topic on which the industry needs to work for a more permanent rollback, Broeksmit said.
Other key issues include the current status of the Consumer Financial Protection Bureau.
“MBA is the last organization that will object to restraints on the bureau, but we understand deeply the potential peril of erasing the CFPB outright,” Broeksmit said.
While much about the future of the CFPB is unknown, “the bottom line is that we have a unique opportunity before us,” Broeksmit said. “We can avoid the disruption and unintended consequences of shuttering the Bureau while still imposing appropriate restraints on it.”
Another big political topic is GSE reform. “The biggest issue hanging over [the Federal Housing Finance Agency] is the GSEs’ release from what was supposed to be a temporary conservatorship–16 years later,” Broeksmit said. “With the new Administration and Congress, we anticipate there will be new momentum for getting this job done,” although he acknowledged that it might be a task for next year.
He emphasized the importance of locking in key reforms to Fannie Mae and Freddie Mac–including those that MBA has led the advocacy efforts on, such as leveling the playing field for lenders of all sizes and business models, requiring transparency and public comment on new activities, and establishing the Uniform Mortgage Backed Security.
Broeksmit noted that MBA has convened a board-level task force on what should happen post-conservatorship, and identified over-arching principles that should frame the release of Fannie and Freddie, including the explicit backstop.
“Devising a plan for ending the conservatorship without causing chaos and disruption for homeowners and financial markets will be a delicate and politically charged process that will require legislation from Congress,” Broeksmit said.
MBA is also involved in advocacy around a new tax bill, and has instituted a board-level task force on that front as well.
“In addition to expanding use of the Low-Income Housing Tax Credit, we want to maintain the deferred tax treatment of Mortgage Servicing Rights,” Broeksmit said. “We also favor extending the expiring 199A small business pass-through deduction and maintaining a differential between the tax rates on capital gains versus ordinary income. We also support reinstating the deductibility of mortgage insurance premiums.”
And, of course, trigger lead legislation remains a priority; Broeksmit noted that MBA has made “significant progress” on that front in the past year.
Despite the current environment, MBA’s goals remain consistent, he said. They include ensuring there are no disruptions in either the single-family or commercial/multifamily market, advocating for the continuation of programs and policies that benefit the housing finance industry, and recommending sensible changes that lower the cost of lending, promote competition, pass savings along to prospective homeowners and renters and maintain support for commercial and multifamily investment.
“In these last three months of frenetic change, I can assure you that MBA is bringing to bear our clout, our credibility and our common sense to the business of governing,” Broeksmit said.
