The Congressional Budget Office last week issued a detailed analysis of the fiscal aspects of H.R. 10, the Financial CHOICE Act, estimating the legislation would reduce federal deficits by $24.1 billion over the 2017-2027 timeframe. “Direct spending would be reduced by $30.1 billion, and revenues would be reduced by $5.9 billion,” the budget office said. Most of the budgetary savings would come from eliminating what’s known as the Orderly Liquidation Fund and from changing how the CFPB is funded. The budget office also estimates that, over the 2017-2027 period, and “assuming appropriation of the necessary amounts,” implementing the bill would cost $1.8 billion. The CHOICE Act was introduced earlier this year by House Financial Services Committee Chairman Jeb Hensarling, R-TX, ...

As a vote by the full House of Representatives nears on H.R. 10, the Financial CHOICE Act, dozens of law professors from around the country wrote congressional leadership to oppose provisions of the bill that would gut the CFPB. In their letter, the legal academics took particular issue with Title VII of the legislation, which would subject the CFPB to the regular congressional appropriations process and eliminate the bureau’s rulemaking, supervisory and enforcement authority (including that over unfair, deceptive or abusive acts or practices, or UDAAP). “Title VII of H.R. 10 seeks to kill the CFPB by a thousand cuts,” the professors said. “Historically, Congress has accorded all federal bank regulators independence to insulate their decisions from industry and political ...

The Financial Services Roundtable advised the Trump administration that the structure of the CFPB needs to be changed, and that the agency should revise a handful of its key mortgage rulemakings, most notably the ability-to-repay/qualified mortgage rule, the Home Mortgage Disclosure Act rule and the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, or TRID. The FSR’s call came in a detailed response to President Trump’s Executive Order 13777, “Reducing Regulation and Controlling Regulatory Costs,” issued earlier this year, directing the Treasury Department to conduct an assessment of financial regulations to evaluate how they align with the White House’s core principles of financial regulation.In terms of the bureau itself, the industry organization said the governance structure ...

Treasury Eyeballing CFPB Rules as Part of Regulatory Relief Review. The Treasury Department is focused on a wide range of regulatory requirements where simple communication and clarification of the regulatory intent is warranted, such as the CFPB’s ability-to-repay rule, the integrated disclosure rule and the Home Mortgage Disclosure Act rule, Craig Phillips, counselor to the Treasury secretary, said during a symposium in New York City last week, according to Inside Mortgage Finance.... Dodd-Frank Changes to be Discussed. House Financial Services Committee Chairman Jeb Hensarling, R-TX, is scheduled to discuss his Dodd-Frank Act alternative, H.R. 10, the Financial CHOICE Act, Tuesday of this week at an event at the American Enterprise Institute....

President Trump’s tax plan would raise the federal debt, but could benefit residential MBS, consumer ABS and asset-backed commercial paper, depending mostly on the effect on the underlying obligors’ after-tax income, according to a recent research report from Moody’s Investors Service. “The administration’s blueprint proposes a reduction in the corporate tax rate to 15 percent from 35 percent, which would also apply to partnerships and other ‘pass-through’ businesses that are currently taxed through their principals’ individual returns,” analysts explained. The White House plan also features...

For the most part, several different factions of the mortgage industry have applauded the move by the Federal Housing Finance Agency to allow Fannie Mae and Freddie Mac to build some type of capital buffer. Now comes the hard part: the details. Early this week, FHFA Acting Deputy Director of the Division of Conservatorship Bob Ryan said in a speech that the capital buffer plan would entail a delay of dividend payments to the U.S. Treasury Department – not an elimination of them. No other specifics were provided...

Craig Phillips, counselor to the Treasury secretary, recently spoke about the importance of credit-risk transfers, the role of private capital in the mortgage market and burdensome regulations. During a credit-risk transfer symposium in New York City earlier this week, he said it’s important to grow participation in the government-sponsored enterprises’ CRT programs. “Every dollar of risk today is a dollar less of taxpayer risk,” said Phillips. “In my view we should continue...

Federal Housing Finance Agency Director Mel Watt is prepared to allow Fannie Mae and Freddie Mac to build some type of capital buffer to avoid a Treasury draw that could weaken investor confidence. But some lawmakers vehemently disagreed with his views during a hearing in the Senate Banking, Housing and Urban Affairs Committee this week. Watt reiterated his concern about the declining capital buffer, which is scheduled to reach zero by 2018 under the preferred stock purchase agreements that set the terms of the conservatorships of the two government-sponsored enterprises. With no capital buffer, Fannie and Freddie would be forced...

The Republican effort to reform many aspects of the Dodd-Frank Act was approved by the House Financial Services Committee last week on a party-line vote. The Financial CHOICE Act will likely be approved by the full House at some point, but DFA reform doesn’t appear to be a priority in the Senate. The House panel approved H.R. 10, the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, on a 34-26 vote after a three-day markup ...

Appropriation levels for FHA and Ginnie Mae from the previous fiscal year were unchanged in the FY 2017 omnibus spending bill, which President Trump signed into law on May 5. The bill, which passed the House by a 309-118 vote and the Senate by a 79-18 vote on May 4, will fund the federal government through the rest of the fiscal year ending Sept. 30, 2017. Among other things, the bill allocates $400 billion to single-family guarantee commitments under the FHA Mutual Mortgage Insurance Fund, and provides $130 million for administrative contract expenses. In addition, the budget provides an additional $30 million if guaranteed loan commitments exceed $200 billion. The agreement also sets aside up to $30 billion for FHA multifamily and specialized loan guarantees during FY 2017. A total of $55 million was set aside for housing counseling programs, $65.3 million for fair housing activities, and $4 million to ...