Legislative Issues

Browse articles from all of our Newsletters related to Legislative Issues.

December 9, 2016 - Inside MBS & ABS

With Coming Change in Executive Branch, Analysts Assess Regulatory Regime Imposed After the Financial Crisis

With November’s election potentially unraveling key features of the financial regulatory structure instituted over the past eight years, experts say it’s time for policymakers to figure out what’s working and what needs to be fixed. During a panel session hosted by the Bipartisan Policy Center, Richard Berner, director of the Office of Financial Research, said that more information is needed about liquidity because a lack of it is often cited as one of the unintended consequences of regulation. “Market liquidity is...


December 8, 2016 - Inside Mortgage Finance

PHH, U.S. Solicitor General Due to Respond to Appeals Ruling in Long-Running Case With CFPB

The DC Circuit Court of Appeals recently ordered PHH Corp. to respond to the Consumer Financial Protection Bureau’s petition for an en banc rehearing in the long-running dispute over alleged violations of the Real Estate Settlement Procedures Act. The lender’s response is due late this week. The court has also invited the U.S. solicitor general to weigh in on the constitutional and RESPA questions associated with the case. No timetable was suggested. However, industry legal observers expect the USSG to respond promptly, given the pending change of presidential administrations, and to support the bureau’s positions. Attorneys at the BuckleySandler law firm noted...


December 8, 2016 - Inside Mortgage Finance

Trump Has Vowed to Clamp Down on Regulations, But He Faces Limited Unilateral Powers, Long Odds

During his successful campaign for the White House, then-candidate Donald Trump won applause and support from the business community for his promise to substantially cut back on federal regulations. Many in the mortgage lending community had hopes the plan would include some relief from the mortgage regulations issued by the Consumer Financial Protection Bureau. Among other things, Trump said he would issue a temporary moratorium on “new agency regulations that are not compelled by Congress or public safety [and] cancel immediately all illegal and overreaching executive orders.” Richard Horn, who worked on the CFPB’s integrated-disclosure rulemaking known as TRID, said...


December 2, 2016 - Inside Nonconforming Markets

Trump Administration to Push for GSE Reform

Reform of the government-sponsored enterprises and a potential for more non-agency lending will be a priority for the Trump administration, according to the presumptive nominee to head the Treasury Department. President-elect Donald Trump is likely to nominate Steve Mnuchin to lead the Treasury. Mnuchin is a former partner at Goldman Sachs, founded the hedge fund Dune Capital Management and was among the investors that purchased IndyMac in 2009. In an interview this week on ...


December 2, 2016 - Inside MBS & ABS

DOJ’s MBS Case Against Deutsche Bank Could Be A Conflict of Interest for the Trump Administration

Democrats in the House Financial Services Committee raised concerns last week about how the Department of Justice will handle MBS-related charges against Deutsche Bank with President-elect Donald Trump set to take office. The Democrats called for strong oversight by eight inspectors general involved with regulators of the financial services industry, noting potential conflicts due to Trump’s business interests. “While federal ethics rules require nearly all government employees to recuse themselves from matters that affect their outside financial interests, these rules do not apply...


December 2, 2016 - Inside MBS & ABS

Can Former MBS Trader Steve Mnuchin Privatize the GSEs? And What About the Government MBS Guaranty?

Shortly after being nominated by President-elect Donald Trump to be his Treasury secretary, investment banker Steve Mnuchin midweek dropped a bombshell on the mortgage market: Ending the conservatorships of Fannie Mae and Freddie Mac would be a top priority. For the most part, the mortgage industry cheered the news, believing that at the very least, Mnuchin would preserve the federal guaranty on existing MBS and into the future. In fact, the market seems to be betting on it. But now comes...


December 1, 2016 - Inside Mortgage Finance

Overtime Pay Injunction Leaves Lenders, Other Employers In Limbo as DOL Ponders Its Response to the Court Order

Mortgage lenders and other employers that have made or are preparing to implement changes to comply with the Department of Labor’s revised overtime pay regulations may have to reevaluate whether to hold off or go forward with those plans, according to wage and overtime experts. On Nov. 22, Judge Amos Mazzant of the Eastern District of Texas granted a request by several states to block the new overtime pay rules that would have gone into effect on Dec. 1. The judge issued a preliminary injunction after determining that the DOL did not have the authority to decide whether workers should be paid overtime based on their salary level alone. Mazzant agreed...


December 1, 2016 - Inside Mortgage Finance

Mortgage Industry Parses Tea Leaves As Trump Begins Assembling Cabinet

The incoming administration of President-elect Donald Trump is likely a couple of months away from formal confirmation by the U.S. Senate of new cabinet officials. But at least one position has apparently been settled – that of Treasury secretary – and other names have been circulated, including that of a possible head of the Department of Housing and Urban Development. At the same time, Trump has begun fleshing out the personnel that will serve on various “landing teams,” which help ease the transitions at various federal agencies. On the cabinet level, the new president has decided...


December 1, 2016 - Inside Mortgage Finance

Trump Administration, Republican Control of Congress Present Mixed Bag for Mortgage Industry Participants

Lenders and servicers are likely to see some regulatory relief in the coming years though federal support for the housing market could also be reduced, according to officials at the Mortgage Bankers Association. The MBA’s Mortgage Action Alliance recently hosted a call with MBA officials providing projections for how the Trump administration and Republican control of Congress will impact the mortgage industry. “Things that were deemed impossible before the election are now in play,” said Meghan Sullivan, the MBA’s Senate Republican lobbyist. She said...


November 28, 2016 - Inside the CFPB

Dems Worried GOP Will Gut Dodd-Frank Via Funding Bill

The leading Democrats on the Senate Banking, Housing and Urban Affairs Committee and the House Financial Services Committee urged Congressional leaders earlier this month to reject any Republican attempts to use so-called must-pass government appropriations legislation to scale back the Dodd-Frank Act and the CFPB. In a letter sent to Senate and House leaders of both parties earlier this month, Sen. Sherrod Brown, D-OH, and Rep. Maxine Waters, D-CA, said they will oppose ideological policy riders to year-end funding legislation aimed at rolling back the consumer protections of Dodd-Frank. “Specially, Congress must not include in end-of-year funding legislation any riders designed to repeal, undermine or delay any provisions of Wall Street reform, including those targeted at the CFPB and the ...


November 28, 2016 - Inside the CFPB

Election Results May Foster More Aggressive State Enforcement

With the CFPB widely expected to be less aggressive on the enforcement front in the wake of the elections earlier this month, the industry is being warned to be wary of a potentially more activist posture on the part of various state government agencies. Since the elections, “there has been much discussion of how expected changes under a Trump administration are likely to reduce the CFPB’s impact, particularly in the enforcement arena,” Ballard Spahr partner Alan Kaplinsky wrote in a recent online blog post. Little attention, however, has been paid to the implications of the election’s results for the role of state attorneys general and state financial services regulators in enforcing federal and state consumer financial protection laws, he added....


November 25, 2016 - Inside The GSEs

Hensarling Calls for Greater Fannie, Freddie Accountability

House Financial Services Committee Chairman Rep. Jeb Hensarling, R-TX, called for greater accountability of the GSEs and discussed reintroducing his Dodd-Frank Act reform bill in the next Congress, during remarks in Washington last week. He said the GOP’s PATH (Protecting American Taxpayers and Homeowners) Act would help end the Fannie Mae and Freddie Mac bailout. The PATH Act, first introduced in 2013, proposes to phase out the GSEs within five years. In addition to ending the “costly” bailout, Hensarling said the bill would protect and restore the FHA to its defined mission, increase mortgage competition, enhance transparency, maximize consumer choice, and break down barriers to private investment capital.


November 23, 2016 - Inside Mortgage Finance

GSE Junior Preferred Shareholders Sense Trump White House May Be More Open to a ‘Recap and Release’ Plan

The election of Donald Trump as the 45th president may open a path out of conservatorship for Fannie Mae and Freddie Mac, some investors in the two government-sponsored enterprises believe. According to interviews conducted with GSE investors, industry lobbyists, trade group officials and others, a “recap and release” plan backed by the junior preferred shareholders of Fannie and Freddie could formally be presented to the Trump administration early next year. There hasn’t...


November 23, 2016 - Inside Mortgage Finance

CFPB Asks Appeals Court to Reconsider Questions of Constitutionality, Legality of Tying Arrangements

The Consumer Financial Protection Bureau late last week filed its much-anticipated petition with the U.S. Court of Appeals for the DC Circuit to reconsider some of the key holdings made by a three-judge panel of the court against the agency in PHH Corp. v. CFPB back in mid-October. One such holding was the panel’s determination that the CFPB’s leadership structure is unconstitutional because it is run by a sole director who can only be removed by the president for cause. While an appeal by the bureau was widely expected, the issue took on a new urgency after Republican real estate developer Donald Trump won the presidential election. In its petition, the CFPB asserted...


November 18, 2016 - Inside MBS & ABS

Groups Seek Broader SCOTUS Interpretation of CTS v. Waldburger, NY Allows MBS Case v. JPM

Three financial-industry trade associations submitted a joint amici brief to the Supreme Court of the U.S. seeking an end to the confusion over whether extender statutes that refer only to the “statute of limitations” should apply to the “statute of repose” as well. The circuit courts are split on the issue, with four courts deviating from a 2014 SCOTUS ruling in CTS v. Waldburger, in which property owners tried to hold CTS Corp., operator of an electronic plant in North Carolina, liable for damages from toxic contaminants on the land. The property owners filed...


November 18, 2016 - Inside MBS & ABS

President Trump Likely to Push Fed to Normalize; MBS, ABS, Credit Risk Transfers Also Affected

Investors are trying to make sense of the new political/economic landscape following the election of Donald Trump to be the next president, and how best to navigate his uncertain, and at times contradictory, signals during his campaign. Much of the conversation over the last week has focused on the likely effect the new regime will have on the Federal Reserve and its chair, Janet Yellen. Trump, who has been a fierce critic of the U.S. central bank, has indicated he won’t outright replace Yellen, but neither will he nominate her for a second term. And of course, what happens with the Fed will spill over, one way or the other, into the financial markets. “The Fed will normalize...


November 17, 2016 - Inside Mortgage Finance

Current Appraisal Regulations Outdated, Industry Needs Standardization, Modernization

Returning appraisal regulations back to the individual states would be counterproductive, according to James Park, executive director of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council. Park and other experts spoke about the need for standardization and modernization at a hearing in the House Financial Services Committee this week. “Replacing the federal system with a state-based system would confuse, not streamline,” he said, noting that the “cornucopia” of statutes and guidelines are confusing and burdensome for everyone. Bill Garber, director of government and external relations at the Appraisal Institute, agreed...


November 17, 2016 - Inside Mortgage Finance

Experts Predict What Financial Regulations Under a Trump Regime Will Look Like

Inside-the-Beltway analysts are predicting that financial regulation and new agency leadership posts will be a primary battleground in the incoming Trump administration. The Bipartisan Policy Center said nominating and confirming people to fill seats on financial regulatory agencies, and at the Treasury, will likely be the most important moves made by the new president and Congress. President-elect Trump wants...


November 14, 2016 - Inside the CFPB

Trump Win Means CFPB Will Be Defanged. But Just How Much?

Last week’s surprise presidential victory by Republican billionaire real estate developer Donald Trump means some big changes for rulemaking and enforcement activities at the CFPB, to the benefit of the financial services industry, according to the consensus of a variety of analysts and experts. The most likely changes have to do with replacing the bureau’s single director leadership structure a bipartisan commission, and subjecting the agency to the congressional appropriations process. But the tenure of the current director, Richard Cordray, also could come into play, some feel. FBR & Co. analyst Edward Mills and his team predict the agency will have a new director “following the D.C. Circuit Court of Appeals ruling [involving PHH Corp.] that allows the president to ...


November 11, 2016 - Inside The GSEs

The Future of the GSEs Brighten. The Reason: Donald Trump

With Republicans poised to have control of the White House and Congress early next year there were initially concerns that the incoming Trump administration might ponder the unthinkable: killing the government guarantee on mortgage-backed securities and eventually dismantling Fannie Mae and Freddie Mac. After all, many elected GOP officials blame the two GSEs for the housing crisis (a notion not universally shared, by any means) and would like to eliminate them. The fear was that the vehicle for GSE euthanasia might very well turn out to be a rewrite of Rep. Jeb Hensarling’s (R-TX) “The Protecting American Taxpayers and Homeowners Act” or PATH legislation. Hensarling is also chairman of the House Financial Services Committee.


November 11, 2016 - Inside MBS & ABS

Market Left With Little Clue as to Fate of Fannie, Freddie Under Incoming Trump Administration

Market analysts, observers and participants alike feel pretty much in the dark about what to expect from Republican President-elect Donald Trump when it comes to the fate of government-sponsored enterprises Fannie Mae and Freddie Mac. “Mortgage finance legislation and the future of the GSEs was never discussed during the campaign so there are no clear indicators of what a Trump administration will do regarding the future of Fannie Mae and Freddie Mac,” analysts at Keefe, Bruyette & Woods said in a post-election review. Complicating life for the new regime is...


November 10, 2016 - Inside Mortgage Finance

CFPB, Dodd-Frank May Be in the Crosshairs of Trump Administration, GOP-Controlled Congress

Mortgage lenders and servicers could see a dramatic change in the regulatory environment following the election of Donald Trump as president with a GOP-controlled Congress. During a campaign of many and sometimes conflicting promises, Trump vowed to repeal the Dodd-Frank Act, which would require Congressional action and, if carried out in its entirety, would abolish the Consumer Financial Protection Bureau. Some observers think a more likely outcome is a restructuring of the CFPB itself and curbing of some regulatory and enforcement actions, perhaps with new leadership. Mortgage lending issues were...


November 4, 2016 - Inside FHA/VA Lending

VA Seeks to Lower Borrowers’ Mortgage Life Insurance Coverage

The Department of Veterans Affairs has proposed to allow eligible veterans to purchase less than the minimum amount of mortgage life insurance coverage required for their VA loan to help them reduce out-of-pocket costs. The proposed rule is aimed at helping VA borrowers lower their premiums and amend current VA regulations to reflect an increase in the statutory maximum amount of coverage available under the Veterans Mortgage Life Insurance (VMLI) program. The VA established...


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