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MBA sends legislative proposals to the Senate

The Mortgage Bankers Association (MBA) sent a 9-page proposal today to the U.S. Senate Committee on Banking, Housing, and Urban Affairs in response to a call for proposals aimed at promoting economic development and consumer and lender participation in the economy.Capitol(1)

Sen. Mike Crapo, R-Idaho, chair of the banking committee, and Senator Sherrod Brown, D-Ohio, ranking member of the committee, put out the call for proposals on March 20, seeking “three to five priority proposals” from all interested stakeholders in the banking, housing and financial services sectors.

The MBA proposal contains seven major sections requesting changes or modifications to existing rules and regulations. The first proposal the MBA makes is a request for regulatory clarity and relief from the Consumer Financial Protection Bureau, claiming the bureau’s “use of consent decrees and administrative decisions to make changes in the rules, rather than formal rulemaking or published guidance” creates uncertainty.

In addition, the MBA proposed changes to the ability-to-repay (ATR) and Qualified Mortgage (QM) rules created by the Dodd-Frank Act and the CFPB. Specifically, the proposal calls for expanding the legal safe harbor on QM loans to include all loans that satisfy the QM requirements, regardless of their annual percentage rate, and expanding the range of loans that qualify for small-loan status under QM rules by increasing the small-loan-size limit from $102,894 (for 2017) to $200,000.

The other five proposals in the MBA letter mostly deal with Basel III capital-reserve rules and commercial mortgages. These proposals request a review of servicing-market regulations and Basel III requirements; a modification to the Federal Home Loan Bank membership rule; modifications to the Basel III rules on High Volatility Commercial Real Estate; additional improvements to the commercial mortgage-backed securities risk-retention rules; and changes to the Low Income Housing Tax Credit program to foster competition and reduce potential conflicts of interest.

Will McDermott is editor of Scotsman Guide Residential Edition. Reach him at (800) 297-6026 or


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