MBA Weighs in with Senate Banking Committee on Bank Capital Modernization

February 27, 2026

The Mortgage Bankers Association sent a letter to Senate Banking Committee Chairman Tim Scott (R-S.C.) and Ranking Member Elizabeth Warren (D-Mass.) ahead of last Thursday’s hearing on bank capital modernization.

Like our joint letter last week to Fed Vice Chair of Supervision Michelle Bowman, Comptroller Jonathan Gould and FDIC Chair Travis Hill, this letter to the Senate Banking Committee highlights our calls for changes to the capital rules that have discouraged bank participation in the origination, servicing, holding and/or securitization of mortgages.

Specifically, MBA’s letter stated that as the banking regulators contemplate a rewrite of the Basel III “Endgame” proposal, it is important that the following considerations be specifically addressed to ensure liquidity and a more robust lender participation in the mortgage origination and servicing market:

• Reducing the 250% risk weight for Mortgage Servicing Agreements (MSAs)

• Raising the Common Equity Tier 1 (CET1) cap on MSAs

• Reducing the 100% risk weight on warehouse lines of credit

• Recalibrate CRE risk-weights to better align the capital charges with the loan-specific risks