Politics & Policy
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General Session: Politics & Policy Independent Mortgage Bankers Conference Hyatt Regency San Francisco Bill Killmer Senior Vice President of Legislative and Political Affairs January 29, 2019 Washington Environmental Scan • Policy/Political Landscape: Change continues – POTUS – 2018 Midterm Elections The 115th Congress Composition: The 116th Congress Composition: House Ratio: 235 GOP, 193 Democrat (7 House Ratio: 235 Democrat; 198 GOP vacancies) (2 vacancies) Senate Ratio – 51 GOP, 49 Democrats, Senate Ratio – 53 GOP, 47 Democrats, (2 Independents caucus with Democrats (Martha McSally (R-AZ) appointed) - Jon Kyl (R-AZ) appointed) • Ongoing necessity to connect with, educate, and persuade policy makers View From Washington – Key Players Shifting Speaker Pelosi’s favorability at decade high following the government shutdown Americans’ views of Nancy Pelosi GALLUP, JAN 2003 – DEC 2018 ■ % favorable ■ % unfavorable 70 60 48 50 38 40 30 23 20 18 10 0 Shutdown Effect 6 Recent/Pending Legislative Activity – Lookback & Outlook Issues Driven by Industry Needs Tax Reform – TCJA – Real Estate Provisions – Bullets Dodged Regulatory Relief Bipartisan Crapo bill (S. 2155, now PL 115-174) – Mortgage title & key provisions addressing MLO “transitional authority,” QM, TRID, HMDA, PACE, credit score competition, VA IRRRLs GSE Issues Congressional stalemate – Hensarling/Delaney discussion draft – wait for Administration. New FHFA Director? Administration – key principles, Executive Order? Actions to provoke the Congress or shrink the housing footprint? White House (NEC), Treasury, OMB, FHFA, HUD – who’s leading the charge? FHA Improvements – possible QC/IT upgrades? $20M? Administrative fee? 7 Issues dictated by external political and economic environment (and the weather…) Treasury/IRS implementation of operational provisions (pass- through entities versus hard C Corps) Budget & Appropriations – Shutdown Continuing Resolution – keeping the government up and running – HUD/FHA funding Disaster Assistance and Recovery Other Efforts: • Flood Insurance (NFIP expires at end of May) • CFPB Guidance– “Rule on Rules” • VA IRRRLs – Ginnie securitization/pooling • Appendix Q – Self Employed/Mortgage Access • FHLB Access • New Priorities: o Big Data/Consumer Data/Federal Preemption? o Cybersecurity/Data Breach?? o Fin Tech/BlockChain? Regulatory Landscape Changing of the Regulatory Guard President Trump’s Overhaul of Financial Regulatory Leaders since January 2017: • OCC – Joseph Otting is Comptroller; SEC – Jay Clayton is Chair; FDIC – Jelena McWilliams is Chair • Fed – Jay Powell is Chairman – clashing with POTUS? • CFPB – Kathy Kraninger confirmed late last year – LO Comp (among other items) • FHFA – Director Watt’s term expired; Otting to Calabria • FHA – Brian Montgomery is Commissioner/Ass’t Secretary for Housing – now also Acting Deputy Secretary Clear emphasis on “right sizing” gov’t regulation/balancing it with needs of an efficient marketplace FHFA – Potential Impact of Change in Leadership Director Watt’s term expired in January 2019, which could result in efforts to: • “Crowd-In” private capital via higher g-fees and/or LLPAs • Decision to suspend contributions to the Housing Trust Fund – Dem hot button • “Administrative” GSE Reform – If legislative reform falters, what will this look like? HUD – Potential Impact of New Leadership Brian Montgomery’s leadership could result in efforts to: • Change the FHA Loan-Level and Annual Certifications to reduce unwarranted liability under the False Claims Act • Encourage more robust participation in the FHA single-family program • Improve FHA single-family servicing requirements • Improve FHA single-family technology • Focus on market share versus loan quality? 116th Congress Political Dynamics & 2020 Outlook The Progressive Caucus and New Democrat Coalition have both increased their ranks by 10% or higher between 2010 and 2018 elections Share of Democratic members in the ____ caucus FIVETHIRTYEIGHT, DATA AS OF DEC. 20, 2018 Women will comprise almost a quarter of Congress, with 24 women in the Senate and 102 in the House Women in Congress, by party Women Democrats (Total: 106) Women Republicans (Total: 21) The 116th Senate: 17 D and 8 R The 116th House: 89 D and 13 R Senate: Democrats, Republicans will take turns playing defense in upcoming elections Senate seats in play, by election year ■ Republican seats ■ Democrat seats 26 22* 22 12 12 9 2018 2020 2022 Source: The Cook Political Report, 2017. *includes special election to fill McCain seat currently held by Sen. Jon Kyl (R-AZ) 22 Republican and 12 Democratic Senate incumbents will face re-election in 2020 2020 Senate race ratings COOK POLITICAL REPORT ■ Solid D ■ Likely D ■ Lean D ■ Lean R ■ Likely R ■ Solid R ■ Not up for re-election WA ME MT ND VT OR MN NH ID SD WI NY WY MI IA PA NE NV MA OH UT IL IN RI CA CO WV KS MO VA KY CT NC TN NJ AZ OK NM AR SC DE MS AL GA MD TX AK LA DC FL HI So What? What Can YOU Do Now? The easiest way to become a industry advocate is to join the Mortgage Action Alliance. MAA is and will always be 3 things: FREE FAST (to join) EASY (to communicate with your elected officials) Join for free at mba.org/joinMAA • Run a MAA Enrollment Campaign at your Company • Contact Alden Knowlton at [email protected] or 202-557-2816 MAA App Join the Mortgage Action Alliance (MAA) Receive updates on bills affecting the real estate finance industry Let your elected officials know how those bills will impact you directly Research bills that MBA is watching Find contact information for your members of Congress Learn about MORPAC • MBA’s federal political action committee – must maintain record-breaking pace • MORPAC is now ranked in the top 20 nationally among trade association PACs in funds raised and funds contributed to federal candidates • MORPAC raised over $2.1 million in 2017-2018 election cycle (a record) • Federal PAC – can only give to federal candidates/raise from individuals • MORPAC CANNOT take corporate funds to spend to support federal candidates • $5,000 limit per year – roughly 90 $5,000 givers a year • Record number of contributors last year alone • MORPAC gave $2.2 million to federal candidates last cycle • MORPAC is bipartisan, with a budget forged by MBA’s legislative/political team and approved by 20-person committee • Aggressive focus on House/Senate leadership & members of most relevant committees Thank you to our 2018 IMB MORPAC Company Campaign Champions Thank You to our top 2018 IMB MAA Companies Stand up for the industry: Come to Washington for NAC! . NAC is MBA’s only event focused solely on speaking up for our industry . Hear from MBA’s policy experts and key lawmakers about critical industry issues . Mix and mingle with your elected officials – while dining at the historic Great Hall in the Library of Congress . Take to Capitol Hill to advocate on behalf of our industry . April 2 –3 in Washington, D.C. Thank you to our sponsors: . Save $100 by registering before February 21 Political Advocacy: Why We Need YOU IMBs are the backbone of MBA Advocacy Why Me? YOU are a leader in your community YOU are an expert in your field YOU are the person that your elected officials want to hear from If not YOU, then who? Join MAA and Contribute to MORPAC today Questions? Comments? Rebuttals? Accusations?.