CFPB, Dodd-Frank and Financial Services Update
MHI Continues to Lead the Manufactured Housing Industry’s Charge for Regulatory Relief
On December 11th, MHI members participated in a special briefing from the Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), Office of the Comptroller of the Currency (OCC), Federal Depository Insurance Corporation (FDIC), National Credit Union Administration (NCUA) and Federal Reserve Board regarding proposed rules requiring home appraisals for higher-risk mortgages.
Under the proposed rules, MHI was able to secure an exemption from these requirements for manufactured home-only loans (those not including the purchase of real estate). Click here for MHI’s summary of the rule. MHI is working to expand this exemption to manufactured home transactions secured by real property. During the briefing, MHI member lenders highlighted the difficulties inherent in using a valuation designed for the site-built housing market and applying it to manufactured housing.
In an effort to focus on the challenges facing the manufactured housing industry in the current regulatory climate, several members of MHI will be meeting personally with CFPB Director Richard Cordray, and senior members of his staff, on January 17th. The focus of this high-level dialogue will be on the unique role manufactured housing plays in providing affordable housing to more than 22 million Americans and the need for regulations that do not limit access to financing in the credit constrained manufactured housing market.
Congress Approves CFPB Privacy Legislation
On December 11th, the Senate approved legislation (H.R. 4014) that extends privacy protections to entities regulated by the CFPB. The House passed the measure in March and it now awaits the President’s signature.
The bill would add the CFPB to the list of federal agencies that may share privileged information with other federal agencies without waiver of any state or federal law privilege. The legislation is intended to give regulated entities that provide privileged information to the CFPB the same anti-waiver protections they have when dealing with other federal banking agencies or state banking regulators. However, the measure contains no provision protecting privileged information the CFPB shares with state attorneys general or other state agencies.
CFPB Allowing Companies to Run Trial Disclosure Programs
On December 13th, the CFPB announced it was proposing a policy to allow companies to test new consumer disclosures on a case-by-case basis in exchange for those companies sharing the results of the trials with the bureau. The CFPB would approve limited exemptions from federal disclosure laws for companies to test new disclosures, the results of which would be shared with the bureau and used by the CFPB to improve its disclosure rules and model forms. Click here for more information.
CFPB and DOJ Enter into Memorandum of Understanding
On December 6th, the CFPB and Department of Justice (DOJ) entered into a joint agreement regarding the enforcement of fair lending standards. Under the memorandum of understanding (MOU), the agencies have agreed to:
• Share information and preserve its confidentiality: The agencies will be sharing information in matters that the CFPB refers to the Justice Department, in joint investigations under the Equal Credit Opportunity Act (ECOA), and in order to coordinate fair lending enforcement. The MOU establishes strict confidentiality protections for this shared information.
• Joint investigations and coordination: The MOU provides for collaboration in investigations as well as coordination in joint investigations. The agencies will also meet regularly to discuss pending fair lending investigations and opportunities for coordination.
• Engage in referrals and notifications: Like other federal bank regulators, the CFPB will refer matters to the DOJ when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination. Because a referral to the Justice Department does not affect the CFPB’s authority to pursue its own supervisory or enforcement action, the CFPB and the Justice Department will coordinate their efforts to avoid unnecessarily duplicative actions. The agencies have also agreed to notify each other at key stages of their enforcement work, such as the opening of an investigation or filing of a lawsuit.
For more information, click here to visit the CFPB website.
Ballard-Spahr Hosting Free AML Enforcement Webinar
On December 18th, in light of recent multi-million anti-money laundering (AML) penalties against HSBC and Standard Chartered Bank, Ballard-Spahr will be hosting a free webinar highlighting lessons learned by banks and other financial services organizations with AML compliance responsibilities. For more information, click here to visit the Ballard-Spahr website.
House and Senate Committee Leadership in the 113th Congress
House leadership has announced the incoming chairmen and ranking members for the upcoming 113th Congress which will convene on January 3, 2013. MHI pays close attention to four committees that deal with legislation affecting the industry: Appropriations, Energy and Commerce, Financial Services, and Ways and Means. Rep. Hal Rogers (R-KY) will stay on as chair of the House Appropriations Committee. Rep. Nita Lowey (D-NY) will replace Rep. Norm Dicks (D-WA), who is retiring, as ranking member. The House Committee on Energy and Commerce leadership will stay the same with Chairman Fred Upton (R-MI) and Ranking Member Henry Waxman (D-CA). On Financial Services, Rep. Jeb Hensarling (R-TX) will take over as chair from Rep. Spencer Bachus (R-AL), who is term-limited. Rep. Maxine Waters (D-CA) will become the ranking member as Rep. Barney Frank (D-MA) is retiring. Leadership will also stay the same on the House Ways and Means Committee with Chairman Dave Camp (R-MI) and Ranking Member Sander Levin (D-MI).
The anticipated committee assignments for the Senate are subject to approval by an organizing resolution by the full Senate when the 113th Congress convenes in January. However, it is expected that Sen. Daniel Inouye (D-HI) will remain Chairman of the Senate Appropriations Committee. On the Republican side, Ranking Member Sen. Thad Cochran (R-MS) is term-limited and will step aside in favor of Sen. Richard Shelby (R-AL). On Senate Banking, Sen. Tim Johnson (D-SD) is expected to remain as chair and Sen. Mike Crapo (R-ID) is expected to succeed Sen. Richard Shelby (R-AL) as Ranking Member. The Senate Committee on Energy and Natural Resources will welcome Sen. Ron Wyden (D-OR) as Chairman as current chair Sen. Jeff Bingaman (D-NM) is retiring. Republican Ranking Member Lisa Murkowski (R-AK) will likely stay at her post. The Senate Finance Committee leadership will remain the same with Chairman Max Baucus (D-MT)and Ranking Member Orrin Hatch (R-UT).
Assistance Needed as MHI Legislative Conference Approaches
The MHI Legislative Conference and Winter Meeting, to be held February 24-26, 2013 at the Sheraton Crystal City, in Crystal City, VA/Washington, D.C., provides conference participants the opportunity to meet with members of their Congressional delegations on issues of key concern to the manufactured housing industry, including reform of the Dodd-Frank and SAFE Acts, improving access to financing, extension of new energy efficient home tax credits, and minimizing the impact of new energy efficiency construction standards for manufactured housing.
The 2012 elections have brought up some significant changes in Congress. With dozens of seats turning over in the House of Representatives and the Senate, it is critical that MHI begin building relationships with new Members of Congress and building on existing ones. To help MHI members in scheduling meetings, MHI staff has developed a quick reference sheet that can be used to help schedule meetings, tips to keep in mind during the meeting, and suggestions for post meeting follow up. Click here to view the reference sheet.
Click here to register for the MHI Legislative Conference and Winter Meeting.
Senate Finance Energy Subcommittee Meets to Discuss Energy Efficiency Tax Incentives
The Senate Finance Energy Subcommittee met on Wednesday, December 12th to discuss three bills (S. 3591, S. 1914 and S. 3352) from Chairman Jeff Bingaman (D-NM) and Sen. Olympia Snowe (R-ME), both retiring members, on adding or modifying existing energy efficiency tax incentives for commercial buildings, homes and industry. The bills will not move before the two senators retire at the end of this year, but they could help discussions on broader tax reform next Congress.
Sen. Ron Wyden (D-OR), the Senate Energy and Natural Resources Committee’s incoming chair, has said the tax code will certainly be a part of the energy agenda next Congress and that he will work closely with Senate Finance Committee Chairman Max Baucus (D-MT) on these issues. MHI members should be aware that energy efficiency tax credits have a continued role to play, although the money may be limited due to tax reform.
Click here for more information on the hearing.
Update on Hurricane Sandy and Proposals for Long-Term Rebuilding and Recovery
Senate Appropriators Propose $60 Billion in Aid for Hurricane Sandy Recovery
On December 12th, the U.S. Senate Appropriations proposed a $60.4 billion Fiscal Year 2012 Supplemental Appropriations to help communities hit by Hurricane Sandy, estimated to be the third most costly disaster in U.S. History. The bill, expected to be considered before Christmas, includes funds necessary to finance needed response and recovery efforts in the nine impacted states, and for long-term building and mitigation efforts in many other states in order to reduce future risks and costs due to severe weather events.
The Senate bill, among other things, proposes:
• An additional $11.5 billion to the Federal Emergency Management Agency (FEMA) for response and recovery efforts related to Hurricane Sandy, including direct aid and housing assistance to disaster survivors, rebuilding of public infrastructure, and hazard mitigation.
• $9.7 billion in borrowing authority for the National Flood Insurance Program, which is currently capped at $20.72 billion.
• $300 million in direct FEMA loans to communities impacted by Hurricane Sandy.
• $15 billion in flexible Community Development Block Grant (CDBG) funds to assist State and local governments to design and carry out recovery and mitigation efforts. These funds can be used to address housing repair or replacement costs unmet by insurance and direct aid. It may also be used to assist small businesses who are under insured or ineligible for other federal small business loans or grants.
• $13 billion in mitigation efforts to reduce the risk of future hazards. These projects will be guided by input from the state and local officials, and coordinated by the Hurricane Sandy Task Force led by HUD Secretary Sean Donovan (see below).
While there is pressure to move the bill as passed, some Republicans are likely to point to a preliminary analysis from the Congressional Budget Office that suggests the full $60.4 billion is not immediately needed and might be best dispensed in smaller amounts with additional controls to prevent waste, fraud and abuse. Additionally, the $60 billion includes mitigation measures to prepare for future storms that may potentially be a lightning rod for controversy.
HUD Secretary Will Lead Long-term Rebuilding and Recovery Efforts
On December 7th, the President issued an executive order, establishing the Hurricane Sandy Rebuilding Task Force to provide the coordination that is necessary to support these rebuilding objectives. Click here for more information.
In collaboration with the leadership provided through the National Disaster Recovery Framework (NDRF), the Task Force will identify opportunities for achieving rebuilding success, consistent with the NDRF’s commitment to support economic vitality, enhance public health and safety, protect and enhance natural and manmade infrastructure, and ensure appropriate accountability.
The work of this task force is likely to form local, state and federal policies regarding housing and community development for years to come. Active involvement by the industry in State-led Disaster Housing Task Forces will ensure that the manufactured and modular housing industry has a key role in rebuilding efforts.
HUD Takes Action to Waive Various Housing Regulations to Help Hurricane Sandy Survivors
Last week HUD waived regulations to allow senior housing providers the flexibility to open up vacant units to evacuees of Hurricane Sandy under the age of 55 without jeopardizing a community’s qualification for certain legal exemptions under the Fair Housing Act. Click here to read HUD’s open letter.
The department also relaxed federal regulations for dozens of “participating jurisdictions” in Hurricane Sandy-impacted areas so they can quickly rehabilitate single-family housing and use vacant rental units to quickly house displaced families. Click here to read HUD’s waivers under the HOME Investment Partnerships Program (HOME).
The Federal Housing Administration (FHA) published guidance to help families with FHA-insured mortgages struggling to repair or rebuild their homes in the wake of major disasters like Hurricane Sandy. FHA’s mortgagee letter reinforces the agency’s long standing policy of extending foreclosure relief and directs lenders to release insurance proceeds to borrowers rather than to apply those payouts to bring delinquent mortgages current. Click here to read the letter.
