Financial Regulatory Reform Resource Center


MBA Responds to Dodd-Frank Rulemakings

Date Filed Letter Topic
04/14/11 MBA Testimony on Risk Retention Risk Retention
12/3/2010 MBA Letter to Ms. Warren on CFPB's Combination of RESPA and TILA RESPA/TILA
11/22/2010 MBA Letter to Treasury, Federal Reserve, HUD, VA, and USDA on QRM and QM Synchronization Risk Retention, Ability to Repay
11/12/2010 MBA Comment Letter to SEC on Issuer Review in ABS Offerings General
11/12/2010 MBA Comment Letter to SEC on ABS Representations and Warranties General
11/10/2010 Joint Letter to Treasury, HUD, and Federal Reserve on RESPA/TILA
RESPA/TILA
10/21/2010 MBA Comment Letter to Federal Banking Agencies on Alternatives to Credit Ratings General
10/07/2010 MBA Letter to Federal Reserve on Risk Retention Study Risk Retention
09/09/2010 MBA Letter to SEC on Regulatory Reform Principles General
09/09/2010 MBA Letter to Treasury on Regulatory Reform Principles General
09/09/2010 MBA Letter to HUD on Regulatory Reform Principles General
09/09/2010 MBA Letter to NCUA on Regulatory Reform Principles General
09/09/2010 MBA Letter to CFTC on Regulatory Reform Principles General
09/09/2010 MBA Letter to FDIC on Regulatory Reform Principles General
09/09/2010 MBA Letter to Federal Reserve on Regulatory Reform Principles General
09/09/2010 MBA Letter to FHFA on Regulatory Reform Principles General
09/09/2010 MBA Letter to FTC on Regulatory Reform Principles General
09/09/2010 MBA Letter to OCC on Regulatory Reform Principles General

April 14, 2011: MBA Launches Risk Retention Resource Center
MBA launched a resource center tracking developments regarding the risk retention rulemakings under Dodd-Frank. Visit the resource center.

March 30, 2011: MBA Provides Summary of Risk Retention Rule
MBA released a summary of the FDIC's recently proposed risk retention rule. Read the residential summary. Read the commercial summary.

March 29, 2011: Dodd-Frank Risk Retention Rule Released
The Federal Deposit Insurance Corporation (FDIC) released a proposed rule that would implement the risk retention provisions of Dodd-Frank for residential and commercial mortgage-backed securities including an exemption from these requirements for qualified residential mortgages or QRMs. During the next week other agencies are expected to adopt and offer the same proposal for public comment. Once the proposal is published in the Federal Register, it will provide 60 days for public comment period. MBA will work closely with its members and other stakeholders to respond to this proposal. Read MBA's press release.

September 9, 2010: MBA Releases Principles for Implementing Regulatory Reform
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is now law - and will usher in the most significant financial overhaul since the Great Depression. The new landscape remains a work in progress, as the bill requires financial regulators to write, over the coming months and years, hundreds of new regulations that will impact the financial services industry. MBA believes this process must proceed in a way that creates necessary reforms while preserving an efficient financial system that provides qualified borrowers with sustainable, affordable credit. That`s why we have created eight principles for financial regulatory reform to guide regulators through this process. Read the principles.

July 21, 2010: President Signs Dodd-Frank Bill, MBA Releases Updated Summary, Continues Webinar Series
President Barack Obama signed the Wall Street Reform and Consumer Protection Act on Wednesday, July 21. Read a summary of the bill. CampusMBA, the education division of MBA, launched a series of webinars focusing on elements of the bill affecting the real estate finance industry. Learn more about upcoming financial regulatory reform webinars.

July 15, 2010: Senate Approves Dodd-Frank Bill, MBA Releases Summary and Webinar Series
The Senate gave its final approval to what proponents call the most significant piece of financial services legislation since the Great Depression. The bill now awaits President Barack Obama`s signature. Read a summary of the bill. CampusMBA, the education division of MBA, launched a series of webinars focusing on elements of the bill affecting the real estate finance industry. Learn more about upcoming financial regulatory reform webinars.

July 15: Senate Approves Dodd-Frank Bill, MBA Releases Summary and Webinar Series
The Senate gave its final approval to what proponents call the most significant piece of financial services legislation since the Great Depression. The bill now awaits President Barack Obama`s signature. Read a summary of the bill. CampusMBA, the education division of MBA, launched a series of webinars focusing on elements of the bill affecting the real estate finance industry. Learn more about upcoming financial regulatory reform webinars.

July 2, 2010: MBA Releases Early Summary of Mortgage Related Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173) MBA released a summary describing the key points in H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act agreed to by conferees from the Senate and House of Representatives on June 29, 2010 that are relevant to MBA members. The Conference Report on the bill was passed by the House of Representatives on June 30, 2010 by a 237 to 192 vote. It is anticipated that the Senate will take up the bill during the week of July 12-19 and that the bill will be passed and signed into law soon after. Read the summary.

July 1, 2010: MBA Submits Letter to House and Senate Financial Services Leaders on Additional Financial Services Reform Concerns
MBA sent a letter to the Honorable Barney Frank (D-MA), Chairman, Committee on Financial Services, U.S. House of Representatives and the Honorable Christopher J. Dodd (D-CT), Chairman, Committee on Banking, Housing & Urban Affairs, U.S. Senate express views on the Conference Committee approved H.R. 4173, the Dodd-Frank Act, which passed the House on June 30. It stated that while changes included in the Conference Report are helpful, MBA still believes that additional improvements can be made to limit the negative impact it will have on the businesses and consumers. Read the letter.
June 25, 2010: MBA Responds to Conference Committee Agreement on Risk Retention, Mortgage Underwriting and Appraisals
Read MBA`s response to the financial regulatory reform legislation, voted out of conference today.

June 18, 2010: MBA, Other Trade Associations, Outline Concerns to Regulatory Reform Conferees

The Mortgage Bankers Association and other trade associations representing the residential mortgage lending and servicing industry sent the attached letter today to the conferees considering the conference report for H.R. 4173, the Restoring American Financial Stability Act of 2010. The letter outlines the industry`s concerns and views about several critical provisions in the base text of the bill that will impact the housing and mortgage markets. Read letter.

June 15, 2010: MBA Sends Letter to Conference Committee Leadership

MBA sent a letter to the House/Senate Conference leadership detailing areas of the Conference Base Text for H.R. 4173, the Restoring American Financial Stability Act of 2010, we hope can be addressed during the conference negotiations. Read letter.


May 28, 2010: MBA Develops Side-by-Side Comparison of Risk Retention Proposals

MBA staff completed a chart comparing two legislative and two regulatory proposals that would require entities engaged in securitization activities to hold a portion of funds in reserve as a so-called "skin in the game" requirement. The table compares the risk retention requirements of the House passed bill, H.R. 4173, the Senate passed bill, S. 3217, the Securities and Exchange Commission (SEC) proposal to modify Regulation AB and the proposed criteria for securities to qualify for the Federal Deposit Insurance Corporation`s (FDIC) "safe harbor" in a receivership proceeding. Read the side-by-side.

May 17, 2010: MBA Issues a Summary of the Merkley Amendment

Also on Wednesday, the Senate approved an MBA-opposed amendment -- offered by Senator Jeff Merkley (D-OR) and approved by a vote of 63 to 36 -- that would prohibit direct and indirect compensation (YSPs and overages) to mortgage originators based on the terms of a loan that would include its rate. The amendment also establishes new minimum underwriting standards for residential mortgage loans. View MBA`s summary of the amendment comparing the language the House-passed regulatory reform bill.

May 13, 2010: MBA Issues Letter to Members on Risk Retention and Underwriting Provision Amendments

Dear MBA Member,

I wanted to give you a quick update on recent events surrounding the debate of S. 3217, the Restoring American Financial Stability Act of 2010, the Senate legislation to modernize financial regulation.

I am pleased to report that last night the Senate passed two amendments that drastically improve the flawed risk retention provisions in the bill that MBA had been furiously advocating to fix on behalf of its residential, multifamily and commercial members.

The Landrieu (D-LA)/Isakson (R-GA) Amendment directs the financial regulators to establish a category of well underwritten single family mortgage loans -- known as "qualified residential mortgages" - that would be exempt from the bill`s risk retention requirements. The passage of this amendment came about as the result of months of intense MBA efforts to educate policymakers on the negative impact the bill, as originally drafted, would have on the mortgage markets.

Additionally, the Senate passed an amendment by Senator Michael Crapo (R-ID) that will require regulators to consider risk retention forms and requirements in order to ensure that regulators are forced to consider the unique nature of the CMBS market. The new language appropriately recognizes the unique nature of the Commercial Mortgage-backed securities (CMBS) market, provides flexibility with regard to the various forms of retained risk, furthers the goal of aligning interests across transactional parties and is a significant step toward restoring the CMBS markets.

MBA`s policy, lobbying and public affairs teams, in partnership with our members, have been working around the clock for several months trying to improve the way this bill applies its risk retention provisions to residential, multifamily and commercial mortgages. We met with dozens of Senators and their staffs to explain how the bill would negatively impact lenders and borrowers alike. Specifically, we worked with the sponsors to help develop both amendments and worked with our members and other trade associations to generate the support that resulted in their passage. We activated our grassroots network, the Mortgage Action Alliance, Inc., to encourage Senators to support our fixes and we undertook a coordinated public affairs campaign that incorporated significant media outreach and article placement efforts.

In addition, we have also created a member taskforce to work with regulators on aligning the interests of all parties in CMBS, evaluating the efficacy of risk retention in the marketplace and ensuring there is flexibility in terms of the forms of risk retention. We have also met with regulators on this issue and created a Reg AB task force, a component of which will work to address risk retention.

In less positive news, the Senate also passed an amendment sponsored by Senator Jeff Merkley (D-OR). The amendment prohibits direct and indirect compensation (YSPs and overages) to mortgage originators based on the terms of a loan that would include its rate and establishes new minimum underwriting standards for residential mortgage loans. The amendment appeared late Tuesday and was passed by a 63-36 vote first thing Wednesday, despite industry concerns.

While prohibiting compensation based on the terms of a loan, the amendment would allow:

-Compensation to an originator based on the principal amount of the loan;

-Compensation to an originator, other than compensation based on the terms of the loan, to be financed through the loan`s rate as long as the originator does not receive any other compensation
from the consumer (or anyone else), other than the compensation financed through the rate. Compensation to the originator through the rate would not be permitted if there is also upfront payment of discount points, or origination points, or fees however denominated, other than third party settlement charges.

-Compensation to a lender from the secondary market for the sale of a consummated loan.

-Incentive payments to a loan originator based on the number of loans originated within a specified period of time.

Additionally, the amendment adds provisions to the Home Ownership and Equity Protection Act (HOEPA) provisions of the Truth in Lending Act (TILA) to prohibit lenders from making residential mortgages unless they determine that the borrower has a reasonable ability to repay the loan and all applicable taxes, insurance and assessments. The amendment spells out what is to be considered by the lender so there is a presumption of compliance with the requirements. The presumption is not available for loans with balloon payments, negative amortization loans, and interest-only loans, making these loans more difficult to originate.

Notably, there is no presumption of compliance where the total points and fees (defined under TILA) payable in connection with the loan exceed three percent of the loan amount. For purposes of computing the three percent, the points and fees for mortgage guarantee insurance under a state or federal program in excess of one percent of the loan amount are excluded.

MBA is extremely concerned that this amendment will unduly tighten credit and increase costs to consumers for mortgage loans. It will also markedly lessen the range of mortgage financing options available to consumers. Rest assured that MBA will work to improve these provisions as the legislative process moves forward.

Click here to read a statement from MBA Chairman Rob Story reacting to yesterday`s developments. If you have any questions, please dont hesitate to drop me a note.

Yours Very Truly,

John A. Courson
President and Chief Executive Officer
Mortgage Bankers Association

March 15, 2010: Senator Dodd Introduces New Legislation on Financial Regulatory Reform

On Monday, March 15, Senate Banking Committee Chairman Chris Dodd (D-CT) released a new legislative proposal for financial regulatory reform. The bill is entitled, "Restoring American Financial Stability Act of 2010." The Banking Committee will begin marking up the proposal on Monday, March 22nd at 4:00 p.m. Read the bill. Read a summary from the Banking Committee. Read MBA`s summary of the risk retention section. Read MBA`s press statement.

December 10: MBA Sends letter to House Leadership Opposing Expected Cram Down Amendment to H.R. 4173

On Thursday, December 10 MBA submitted a letter to the House leadership opposing an expected mortgage bankruptcy cram down amendment to H.R. 4173. Read the letter.

December 9: MBA Sends Letter to House Leadership Opposing H.R. 4173

On Wednesday, December 9, MBA sent a letter to house leadership opposing H.R. 4173. Read the letter.

December 8: MBA and a Collection of Allied Trade Associations Sent a Letter to the U.S. House of Representatives Committee on Rules

On Tuesday, December 8, 2009, MBA and a collection of allied trade associations sent a letter to the U.S. House of Representatives Committee on Rules requesting the committee make in order an MBA-supported amendment to H.R. 4173, Wall Street Reform and Consumer Protection Act of 2009. The bipartisan amendment would require regulators to establish a category of mortgage loans that would be exempt from the bill`s risk retention requirements.

October 13: MBA Sends Letter to Congress Raising Strong Concerns with Consumer Financial Protection Agency (CFPA) Bill
MBA President and CEO John Courson sent a letter to House Financial Services Committee Chairman Barney Frank (D-MA) and Ranking Member Spencer Bachus (R-AL) outlining MBA`s concerns with H.R. 3126, the Consumer Financial Protection Agency Act. Chief among those concerns is that the bill fails to empower the CFPA to establish uniform national standards that will regulate all lenders and protect all borrowers consistently regardless of where they live. MBA also objected to the creation of a CFPA as a stand-alone agency, rather than placing consumer protection functions within a prudential financial regulator.

Read the letter.

Mortgage Improvement and Regulation Act (MIRA)

As Congress tackles the difficult task of bringing needed reform to mortgage industry regulation, the Mortgage Bankers Association (MBA) has developed a proposal for reforming lending and servicing practices and streamlining and improving consumer protection.

MBA`s proposal the Mortgage Improvement and Regulation Act (MIRA) would establish a new, comprehensive framework for national regulation of mortgage lending to protect borrowers and improve the mortgage process nationwide. MBA is actively sharing this proposal with Congress (read letters to House and Senate ).

On behalf of our 2,400 members, MBA stands ready to work with Congress on legislation that achieves these goals. Reform of mortgage industry regulation is urgently needed and must be a key component of our nation`s economic recovery. With MIRA, we believe we have a comprehensive proposal that is truly national in scope one that will lead to a more competitive primary mortgage market with increased transparency and much greater protection for consumers, said John A. Courson, President and Chief Executive Officer, Mortgage Bankers Association.

Read a summary of the proposed legislation.

Read a side-by-side comparison matrix of H.R. 3915 (Frank Bill), Federal Reserve`s Final HOEPA Rule and MBA`s Draft Mortgage Improvement and Regulation Act (MIRA).

Read MBA`s Issue Brief on MIRA.

Read the testimony of David G. Kittle, CMB, Chairman, Mortgage Bankers Association, before the Subcommittee on Financial Institutions and Consumer Credit, Committee on Financial Services, United States House of Representatives, hearing on The Current State of the American Mortgage Lending System and Proposals to Reform that System from March 11, 2009

Some of the key areas of reform in this proposed legislation include:

New, Federal Regulation. Any new regulatory framework must begin with the creation of a strong federal regulator to set lending and servicing standards. The new regulator would be charged with regulating independent mortgage bankers and brokers and assuring that these entities meet tough national licensing and registration standards as well as increased net worth and bonding requirements. The new regulator also will work with federal and state regulators to enforce lending standards for their regulated entities. Additionally, to better protect consumers, MIRA will require enhanced consumer disclosures, mandate pre-purchase counseling and expand financial literacy programs.

A Strong Consumer Protection Standard for Everyone, Regardless of Who Sells the Mortgage Or Where They Live. MIRA will replace the current patchwork of state and federal laws with a new uniform lending standard, incorporating in statute many of the rules promulgated by the Federal Reserve Board to address higher priced mortgage loans and deceptive advertising. It will then build on that framework by merging in many of the provisions passed by the House of Representatives in 2007 as part of H.R. 3915, as well as new, enhanced protections designed by MBA.

A Partnership with State Regulators. While MIRA would preempt contrary state and local laws, it would establish a partnership of state and federal regulators to make necessary changes to the national mortgage standards. State regulators would also examine, review and enforce the new uniform lending standard and receive additional resources, funded by assessments on regulated entities, to carry out their responsibilities.


MBA's Risk Retention Resource Center
MBA launched a resource center on the implementation of the risk retention provisions of Dodd-Frank. Visit the Risk Retention Resource Center to view all activity on this subject.