By Rod Alba
The American Bankers Association continues its advocacy efforts on multiple issues that impact mortgage lending. Here is a rundown of important recent activities:
ABA presses for action on illegal texts
ABA has joined with multiple stakeholders in a letter urging the Federal Communications Commission to issue new rules that would help stem the flow of illegal texts and calls to consumers. ABA’s letter follows previous a correspondence sent to the FCC by 52 state bankers associations, which urged the agency to adopt the new rules.
Effect on banks: ABA has sent strong warnings to FCC and other government protection agencies that bad actors are increasingly using email-to-text as a primary means to place a large volume of illegal texts quickly. Such fake fraud alerts are being sent to thousands of bank customers who are then targeted for harmful scams. This letter advances a joint industry voice to push for proper laws on a growing problem that must be addressed to protect consumers and protect banker relationships with their customers.
ABA and allies ask for mortgage insurance premium tax deduction
In a joint letter, ABA and other trade groups are urging lawmakers to support the bipartisan Middle Class Mortgage Insurance Premium Act, which would restore and permanently extend the mortgage insurance tax deduction that was available to eligible taxpayers from 2007 to 2021.
Effect on banks: GOP members of the House Ways and Means Committee created Committee Tax Teams, comprising Republican members committed to examining tax policies from 2017 tax cuts (scheduled to lapse in 2025), and exploring additional tax policy ideas that will shield Americans from any future tax hikes. The committee accepted comments through Oct. 15 to inform members of the effect of the looming expiration of the Tax Cut and Jobs Act individual tax code sections. The letter expressed that deduction for mortgage insurance premiums is both good tax policy and good housing policy. In addition, the deduction is a strong tool to support existing homeowners and prospective homebuyers. Low down-payment mortgages, including conventional mortgages with private mortgage insurance and loans insured or guaranteed by the Federal Housing Administration, the Veterans Administration and the Department of Agriculture Rural Housing Service, are safe mortgage products and programs that have proven critical for many first-time, low- and moderate-income and minority homebuyers to secure financing and realize the stability of homeownership.
ABA’s Nichols calls on Congress, White House to address fraud
Speaking at ABA’s Annual Convention in New York (pictured below), ABA President and CEO Rob Nichols called for immediate federal government action to develop a national fraud and scam prevention strategy, saying that fraud has become an “insidious problem.” Nichols called on the next administration and Congress to create and fund an Office of Scam and Fraud Prevention and develop a national strategy that will address all parts of the fraud ecosystem and help reduce the number of Americans who fall victim to scams.
Effect on banks: Increasing levels of fraud can have a crippling effect on banks and ABA has emphasized that the fight against fraud requires a whole-government approach that starts at the very top of each bank. Mortgage-related fraud impacts every aspect of the home buying and mortgage servicing process. ABA is committed to pressuring policymakers to join in this fight with approaches that are effective and protective of institutions and consumers.
GSE insurance verification update and ABA analysis
In February, the Federal Housing Finance Agency advanced revisions to the property insurance requirements in Fannie Mae and Freddie Mac selling and servicing guides. The revisions state that mere verification of a replacement cost value insurance policy is not sufficient evidence of required insurance coverage for loans sold to the GSEs. ABA and other trade groups immediately expressed concern, explaining that the updates present legal and operational challenges to lenders and servicers, and also could have a detrimental effect on consumers. ABA staff continues full engagement with policymakers on this matter. Recently, ABA released a members-only analysis of Fannie Mae’s and Freddie Mac’s bulletins regarding Actual Cash Value coverage. The ABA analysis provides an overview of the updates, highlights the various legal and operational challenges that lenders and servicers will encounter if the policy is implemented as written and discusses ABA advocacy efforts.
Effect on banks: Recently, ABA and industry partners obtained important concessions when Fannie Mae and Freddie Mac announced they would hold off on plans to act upon mortgages on homes that don’t carry full replacement-value insurance coverage. Notwithstanding this temporary pause in enforcement, the new policy remains infeasible and impractical, and ABA is engaged with industry allies to assure accommodations. We will issue updates as this matter advances.
ABA recognized as top-performing lobbying association
ABA was recognized as the top-performing national trade association in the areas of lobbying, multilateral impact and local impact by the global advisory firm APCO in its annual study of association effectiveness.
Effect on banks: ABA represents the nation’s $24 trillion banking industry, and advances a unified voice for small, regional and large banks. To advance effective advocacy, ABA needs full involvement and input from all banks. The formation of mortgage finance policy occurs through the Mortgage Markets Committee, which is designated to monitor developments in both primary and secondary mortgage markets. The MMC has several subcommittees and deliberates and makes recommendations on legislative and regulatory issues that affect the operations and competitiveness of ABA members in real estate finance.
Rod Alba is ABA’s SVP for real estate finance.
