A provision in the proposal would remove the requirement for banks to deduct mortgage servicing rights that reach a certain cap from common equity tier one capital and replace it with a 250% risk weighting on the assets, which might not be low enough to incentivize banks to increase their MSR holdings.
“30+ day impairments soared 51 basis points month-over-month in February, marking the largest monthly increase outside of COVID and Sunday month-end effects,” according to dv01.