Association outlines proposals to ease regulatory burdens
The Mortgage Bankers Association (MBA) has formally submitted a letter to the Office of Management and Budget (OMB) outlining specific regulations across several federal agencies that the association believes should be rescinded or revised.
The letter, a response to the OMB’s Request for Information (RFI) on “unnecessary, unlawful, unduly burdensome, and unsound rules,” details MBA’s concerns that certain regulations hinder consumer access to mortgage credit and stifle innovation.
The MBA’s letter is divided into two sections. The first section identifies rules that the MBA recommends for rescission, including the Consumer Financial Protection Bureau’s (CFPB) nonbank registry and its Section 1071 small business lending reporting rules.
Additionally, the MBA suggests that the Department of Housing and Urban Development (HUD) should rescind its recent rules concerning floodplain management and energy efficiency standards.
The second section of the MBA’s letter focuses on regulations that the association believes warrant revisions. These include the CFPB’s Real Estate Settlement Procedures Act (RESPA) Section 8 and Regulation X servicing rules.
The MBA also recommends revisions to the Federal Housing Finance Agency’s (FHFA) incorporation of Unfair, Deceptive, or Abusive Acts or Practices (UDAP) into its Equitable Housing Finance plans for government-sponsored enterprises (GSEs).
In the letter, the MBA stated its general support for the rulemaking process when it provides clear guidelines. However, the association expressed concerns that some agency rules exceed statutory authority, create significant costs and liabilities, and negatively impact credit availability.
The MBA’s letter emphasizes its support for the Trump administration’s deregulation efforts and encourages agencies to utilize established legal procedures, such as notice and comment, when rescinding rules to ensure informed feedback from the industry is considered.
The MBA’s letter also touches upon the Securities and Exchange Commission’s (SEC) Regulation AB II, which governs disclosures for publicly registered mortgage securitizations. The association recommends greater harmonization of disclosure requirements across all types of mortgage securitization, advocating for alignment with the practices currently used in private 144A transactions.
Meanwhile, the MBA suggests the SEC provide more flexibility in defining required data fields, proposing that the industry-led Mortgage Industry Standards Maintenance Organization (MISMO) establish these definitions, with SEC acceptance through staff guidance.
What are your thoughts on the MBA’s recommendations? Share your insights below.
