MBA State Relations Committee Update State Highlights
Advocacy News and Information From the Latest Issue of the MBA State Relations Committee Update
Oklahoma Governor Kevin Stitt signed legislation to permit Mortgage Loan Originators (MLOs) to work remotely, SB 1492. Ahead of this signature, Oklahoma MBA (OMBA) and MBA signed a joint letter in support to assure the Governor understood the fee structure changes were industry negotiated and supported. With the advancement of remote work, the industry worked with regulators to understand and support needed updates to our supervisory partners. Additionally, Nevada proposed regulations following the enactment of SB 355 which allowed remote work. The proposal includes a more restrictive view on remote work. The Nevada Mortgage Lenders Association and MBA plan to coordinate comment to ensure the spirit and purpose of SB 355 is not lost. Oklahoma is the 30th state to permanently enact remote work since COVID and will be the third to enact legislation this year, behind Iowa (HF 2392) and West Virginia (SB 613). The Nevada proposal restricting the flexibility provided by SB 355 moves this policy in the wrong direction, away from creating a nimbler and more sustainable workforce in times of natural disasters. MBA will continue to work with its members and partner state associations to support remote work policies consistent with the association’s model. MBA will be gathering feedback on the Nevada proposal to help inform industry comment letters. Please provide your comments to Liz Facemire ([email protected]) by Friday May 10th.
Massachusetts Governor Maura Healey signed legislation, H.4582, which included H.4466 language that reinstates provisions to permanently allow remote counseling options for reverse mortgage loans. H.4582 provisions are went into effect March 31, 2024. In April, MBA along with the Massachusetts Mortgage Bankers Association (MMBA), issued a Mortgage Action Alliance call to action for members to contact their representatives to allow telephone and video counseling for reverse mortgages in Massachusetts to continue. Thanks to MMBA’s advocacy, language was included in the House version of an emergency funding bill (sections 11 & 12 of H.4466 – now signed H.4582), but the Senate version did not. The call to action was issued while a six-member conference committee worked to resolve final language differences between the two chambers and to include the House language in a final bill. The provision in state law, which permitted these forms of consumer counseling on reverse mortgage loans, expired on March 31, 2024. MMBA’s efforts to retain flexibilities proven through the pandemic provide another advancement for our industry to operate safely and efficiently while meeting consumer where they are located. Any instance of embracing remote policies moves the mortgage industry into a more flexible workforce that adapts to changing consumer demands and expectations. MBA will continue to support efforts to advance aspects of remote work throughout the mortgage process to meet today’s consumer demands and create a more sustainable and flexible industry.
The Hawaii legislature passed legislation, HB 2641, to reestablish an appraisal management company (AMC) licensing standards program within the Department of Commerce and Consumer Affairs (DCCA). The Hawaii Legislature had created the program in 2017, but it failed to reauthorize it before adjourning for the year in 2023. Further complicating matters, the DCCA delayed notification to licensed AMCs, finally sending communication on August 29th that the program had ended June 30th and all AMC licenses we no longer valid. The MBA of Hawaii (MBAHI) and MBA sought to amend the current version of the bill to include language that would provide a safe harbor for the gap through testimony and other advocacy efforts, but the state was unwilling to accept responsibility for the lapse in licensing. This legislation will re-start licensing September 1, 2024.Dodd-Frank requires state licensure for lenders to utilize AMCs for Federally Related Transactions. The Governor is expected to sign the bill as late as July 2024. MBA will continue to support efforts by MBAHI and other trades to urge the Governor to sign HB 2641 sooner, so DCCA has more time to re-create the AMC program.
The Illinois Department of Financial and Professional Regulation (IDFPR) posted final regulations for the Illinois Community Reinvestment Act on their website. The finalization of these regulations comes after years of advocacy and warnings from MBA and the Illinois MBA (ILMBA) and two attempts at finalizing these regulations. In the last year, MBA and ILMBA attended numerous meetings and submitted comments urging the IDFPR and the Joint Committee on Administrative Rules (JCAR) to reconsider certain elements of the rules. The significant concerns raised start with the continued change in regulatory direction by IDFPR, because the revisions diverge from: the language of the enacted Illinois CRA statute; IDFPR’s own public commentary about its direction for the rules in written public statements and stakeholder meetings dating back to the Spring of 2021; and the proposed rules released for comment in December 2022. Despite continued engagement by industry, the final rules retain problematic elements both MBA and ILMBA objected to, including the misconception of “loan churning” in the space and an inappropriate legal standard to analyze lenders control over independent appraisers and possible bias. IDFPR rejected MBA’s suggestion to rely on HMDA lending data as the independent objective metric for establishing annual examination priorities for IMBs. The rules will also establish an unnecessarily narrow approach that could upend lending to LMI borrowers by counting only the origination and then initial sale of a mortgage loan as eligible for CRA credit along with conflicting language around third-party lending which may disrupt the broker/lender relationship. Lastly, the final language aims to hold lenders accountable for decisions made by independent appraiser. MBA and ILMBA will continue to monitor the situation as the rules take effect and pursue any avenues to rectify the harm seen in these rules.
On May 6, the Conference of State Bank Supervisors (CSBS) hosted its biweekly “Office Hours” on MCRV6 implementation. MBA urges members to participate in these office hours to ensure all issues are addressed prior to the May 2024 filing date. CSBS has continued to make updates to their FAQs document, provided a list of states who have agreed to use the State Specific Supplemental Form (SSSF), and updated the list states offering a grace period for Q1 2024 MCRV6 filings. All updates and resources can be found on the new Mortgage Call Report page, including a self-led course on MCRV6. To join office hours, use the following link (valid for all sessions) and ID and Passcode:
- Link: https://us02web.zoom.us/j/82102995323?pwd=dTV6WHdXWjZNUWVsQzVmVmpUdTR2UT09
- Meeting ID: 821 0299 5323
- Passcode: 102696
Licensees should already be collecting the appropriate MCR data for this new version and preparing to file. The office hours series is expected to end on May 20th just after the first quarter filing deadline. Additionally, MBA will record a live conversation on MCRV6 implementation featuring CSBS staff and the leadership of the MBA State Legislative & Regulatory Committee.
Both Kentucky and Nebraska enacted broad data privacy bills: Kentucky Governor Beshear signed the Kentucky Consumer Data Protection Act (KCDPA) on April 4th, and Nebraska Governor Pillen signed the Data Privacy Act (DPA) on April 17th. Sixteen states have now enacted broad data privacy laws. KCDPA will take effect on January 1, 2026, while Nebraska’s DPA will take effect January 1, 2025. Importantly, both laws exempt financial institutions, affiliates of financial institutions, and data subject to Gramm-Leach-Bliley Act (GLBA). The Kentucky and Nebraska bills recognize the current standard of data protection provided under the Federal GLBA, ensuring our industry can continue to process information pursuant to existing federal data protections while instituting much needed regulation in other industries. Without provisions acknowledging the current federal standard, state bills could create a messy state-by-state patchwork of rules that will increase costs for consumers and may lead to lower competition in the market. Since 2018, broad data privacy legislation has been gaining traction across the states and this trend is expected to gain momentum. It is important for member companies and state and local association partners to continue to coordinate with MBA to help educate policymakers on the importance of the GLBA exemption to our industry.
Georgia Governor Brian Kemp signed HB 876, which will change the state’s “bona fide discount point” definition to rely on the Average Prime Offer Rate (APOR). HB 876 (see page 43) updates a definition that previously relied on the greater of Fannie Mae or Freddie Mac’s Required Net Yield Index. Freddie Mac retired its index years ago, and Fannie Mae recently announced it will be retiring its index by June 3, 2024. Georgia’s legislation to address this issue will take effect June 1, 2024, ahead of the retirement. Georgia's move to APOR provides alignment with Federal definitions and allows for lenders to apply federal compliance standards to the state in lieu of updating practices to a new index. Georgia was one of four states relying on the Fannie/Freddie Required Net Yield Indices. Without addressing this pending conflict in statute, lenders would not be able to remove discount points from the high-cost calculation tests and potentially not provide the best possible loan terms for consumers. Arkansas, North Carolina, and South Carolina also rely on the Fannie Mae or Freddie Mac index by statute. MBA and its state partners are working with regulators and attorneys general in these respective states to find opportunity to resolve this issue prior to June 3, 2024.