March 26, 2015

Mortgage servicing assets study among reg relief bills cleared by House panel

The House Financial Services Committee, voting 49-9, on Thursday favorably reported to the full House a NAFCU-backed bill to require federal regulators to "stop and study" the impact of their rules, including NCUA's risk-based capital proposal, on financial institutions' mortgage servicing assets.

Now awaiting House action, this was one of several measures marked up and approved by the committee to provide NAFCU-sought relief from onerous rules.

As approved by the committee, H.R. 1408, the "Mortgage Servicing Asset Capital Requirement Act of 2015," by Reps. Ed Perlmutter, D-Colo., and Blaine Luetkemeyer, R-Mo., would require NCUA to take time to study its second risk-based capital proposal's impact on credit unions' mortgage servicing assets before setting a final RBC rule that covers such assets. NCUA would be required to report study findings to Congress within six months following enactment of the bill; no final RBC rule that includes mortgage servicing assets could be issued for three months following that date.

NAFCU has specific concerns about RBC's impact on mortgage servicing assets, which would have a risk weight of 250 percent under RBC2. That is unchanged from the first RBC proposal. NAFCU believes the weight is artificially high and excessive; it has recommended a risk weight of 150 percent for these assets.

Comments on NCUA's second RBC proposal are due to the agency on April 27. NAFCU encourages credit unions to comment and has produced a set of talking points to aid that effort.

The committee yesterday also approved:

  • H.R. 601, the "Eliminate Privacy Notice Confusion Act," to ease statutory privacy notice requirements (a key element of NAFCU's five-point plan for credit union regulatory relief);
  • H.R. 650, the "Preserving Access to Manufactured Housing Act," to modify the definitions of a mortgage originator and a high-cost mortgage to keep credit available to consumers with manufactured housing loans;
  • H.R. 685, the "Mortgage Choice Act," to clarify the definition of points and fees under the Truth in Lending Act and applied in CFPB's qualified mortgage rule;
  • H.R. 1195, the "Bureau of Consumer Financial Protection Advisory Boards Act," to make CFPB's Credit Union Advisory Council permanent;
  • H.R. 1259, the "Helping Expand Lending Practices in Rural Communities Act," to help small creditors as they work under CFPB's "rural area" definition;
  • H.R. 1265, the "Bureau Advisory Commission Transparency Act," to ensure CFPB's Credit Union Advisory Council meetings are open to the public;
  • H.R. 1480, the "SAFE Act Confidentiality and Privilege Enhancement Act," to allow state and federal regulatory officials with financial oversight to access information from the Nationwide Mortgage Licensing System and Registry without loss of privilege or confidentiality protections;
  • H.R. 1529, the "Community Institution Mortgage Relief Act," providing a legal TILA safe harbor from escrow requirements to financial institutions with less than $10 billion in assets that hold loans in portfolio for three years and exempt from the requirements servicers that annually service 20,000 or fewer loans.