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ACUMA ONpoint
ACUMA ONpoint
Strategic Shifts in Housing and Political Landscapes
Leah Dempsey and Zach Pfister from Brownstein Hyatt Farber and Schreck, both join us to dissect the high-stakes world of housing policy as voters head to the polls. Learn what's at stake with tax credits for first-time homebuyers and strategies to reduce regulatory burdens, particularly how these proposals might reshape the credit union mortgage industry. Join Leah and Zach, along with ACUMA President Peter Benjamin, as they unpack the critical issues at play, from campaign spending frenzies to the tight races influenced by political division and gerrymandering. The outcome of these elections is more than just who sits in Congress; it could redefine the landscape of housing policy for years to come. Tune in now. Sponsored by Lender Price.
The views and opinions expressed in this podcast do not necessarily reflect the views or positions of ACUMA, its board of directors, its management staff or its members. The podcast discussion presented is conversational in nature and for general information only.
Speaker 2:Hello and welcome to Ackman's All Point Podcast, the policy series where we focus on policy issues impacting the credit union mortgage industry. I'm your host, peter Benjamin. Today's episode is being brought to you by LenderPrice, the most modern and proven product and pricing engine in lending. Whether it's enhancing the pricing experience or efficiently matching homebuyers with the ideal loan program, lenderprice empowers all credit unions to excel and innovate in today's dynamic market. Their cost-effective pricing engine provides modern APIs that deliver seamless integrations, full product and rate support, custom workflows, and it's simple and easy to use for loan originators. Lenderprice is proud to sponsor the Acme On Point podcast policy series, where discussions on the policy issues impacting credit union mortgage lenders take center stage. Get to know LenderPrice and book a demo at wwwlenderpricecom. Joining us today as our resident experts. We are fortunate enough to have both Leah Dempsey, shareholder, and Zach Bisser, policy director, with Brown scene. Leah and Zach, how are you both doing today? No, don't jump out at once. Come on, guys. How are you guys doing?
Speaker 3:I was. I was going to let Zach go because I I got in last night almost at 11 PM from California, from California, although it was beautiful out in Palm Springs. But I bet Zach's probably feeling a little more energized than me, I like it.
Speaker 2:I like it, zach, how are you doing? Doing well, peter, I love it. I love it. All right. So here we are. This is me. They're all special, all of our policy episodes are special, but this one's me it's specially special because it is officially the last episode before the election, and so we're really going to focus on that, and that's why you're both here. So let's start diving into the election and, really, as our listeners start heading into November and start thinking about housing, heading into November. You can correct me if I'm wrong, but all the debates are done. The only presidential election presidential debate is done. The only vice president debate is done, you know. So, focusing on housing, what do our listeners need to think about as they start heading into the polls or heading into the the ballot boxes to cast their votes, when thinking about housing? So, uh, we'll start with leo, we'll let you go first. I know you you're tired, but so you're going first.
Speaker 3:No, thank you guys for having me, and you know a few weeks are left and everyone is looking forward to their text messages stopping and I've gotten to today.
Speaker 3:Yeah, I get, I will say I'm the Republican on the podcast.
Speaker 3:But I'm very much up in the air about Ted Cruz at this point because I get about four phone calls from him every day and about 10 text messages, which is a little bit ironic because he, if the Republicans take the Senate, is going to be the chair of the Senate Commerce Committee, which oversees robocalls, but he certainly likes to make robocalls, likes to make Robocalls, but no, in all seriousness, right now, I mean a lot of people have actually already voted, a lot of states have early voting.
Speaker 3:So there are many housing issues that have been discussed over the past several months, as we've broken down here, and certainly many that came up in the most recent vice presidential debate. But at this point, between now and the election, particularly from the agencies, I don't think we're going to see any other major surprise rulemakings. I think at this point they're focused on pushing out maybe guidance or smaller ticket items that are on their to-do list. Guidance or or smaller ticket items that are on their to-do list, but some of their their major will makings and major initiatives that both sides hung their hats on, um I I think are done for the most part, but I'll let zach jump in to see if he agrees with that or is any other thoughts yeah, I mean, I tend to agree with the, the if you look back on the, uh, the and I agree, peter, that they're done.
Speaker 4:The themes have fallen a bit along traditional lines, right, harris has proposed tax credits for first-time homebuyers, trump has danced around cutting red tape and regulatory burden and even tied in restrictions on the immigrant population from accessing mortgages as a way to increase supply. I think that we discussed this a little bit at the ACUMA conference in Vegas as well, where you know we are. We're certainly in the promise everything season of the of the election stretch here, where proposals are floating around that are, from a feasibility standpoint, a bit complicated some unrealistic standpoint, a bit complicated, some unrealistic, many focusing on the affordability side but maybe not the supply side or vice versa, and I think we're all in agreement that a holistic approach needs to be taken. A lot of this is going to revolve around just who's in charge next Congress, and it's probably important that we just touch on that briefly. With respect to just where things stand, over $2 billion has been spent on this election by both sides. I think if you throw in the race for Congress, you get closer to somewhere around $4 billion all in in terms of campaign spending and what that's resulted in on October 15th, roughly three weeks before the election, is pretty much a tie across the board.
Speaker 4:Every swing state that matters, every congressional House race that matters, every Senate race that matters, they're all inside the margin of error and everyone has their own opinions on their level of trust in public polling these days, after quite a few surprises in recent years. But margins of error are important in determining the accuracy of any given poll. And when you have Trump and Harris at 47 and 49 in Nevada or 50 and 49 in Wisconsin, what that really means in a poll with a 3% margin of error is that Trump could win by six points or Harris could win that state by six. And if we get into these you know fringes of the variables, two ends of the spectrum. The outcome on election night could be wildly different. Republicans could sweep control and in some instances Democrats could potentially even sweep control.
Speaker 4:Leah mentioned this Texas Senate race that was not even on the radar three months ago. That is now essentially tied. There's another one in race that was not even on the radar three months ago. That is now essentially tied. There's another one in Nebraska that was third tier status at best and there's an independent running against an incumbent Republican and they are essentially tied. But you have Democratic incumbents who have been leading all along who are now tied with their opponents.
Speaker 4:So it's going to be a long election night and really it's best to think of this as an election month, because a lot of these races aren't going to be decided for weeks afterwards and we are very much looking down the pike to a scenario in which, similar to 2020, where Joe Biden won a handful of states by a couple of 10,000 votes 12,000 in Georgia, for example there's going to be a lot of a lot of results probably litigated there. You know there are going to be more than a handful of states probably decided by less than a point. There might be recounts, so we might not know fully how the dust settles until we're getting into the late November, early December timeframe, and that's whenever you know policymakers will see who has the upper hand and you know how they are going to pursue their priorities new Congress and new administration.
Speaker 2:So all right. So three questions because I mean and thank you for all that, all right. So first question is you know, from the dollar amount standpoint, and all the amount spent on these races, comparatively speaking, the past years? How's this compared to past election years? Is this on?
Speaker 4:par. It's always more than the previous cycle, but this one, I think, will shatter records once again. I mean, for example, kamala Harris became the nominee later than anyone in recent history, right, and you know she. She raised a billion dollars. A billion dollars. This is not the Biden campaign. She's raised a billion dollars since you know, the late summer, the Trump campaign. Similarly, with including outside spending. You know well, over a billion dollars, including outside spending. You know well over a billion dollars.
Speaker 4:And house races that 10 years ago may have cost each side two or three million dollars to run a competitive race.
Speaker 4:In some of these swing districts they're spending 20 million dollars on a house race and part of that is because the political division between the electorate and the subsequent gerrymandering of congressional districts by state legislatures on both sides the blue states and red states are both guilty of it. If they've got the power to do it, they do it. That has resulted in a fewer and fewer number, smaller number, of competitive House races that determine control, competitive House races that determine control. So there are roughly two dozen House races out of 435 seats that are actually considered. You know, swing districts gettable to flip to the other side, we have a four-vote margin in the House of Representatives. Right now, with Republicans in control, democrats need to net four seats. Republicans need to net one seat because West Virginia is already in the bag for them and there's nothing to suggest that this won't continue for the foreseeable future in the next couple of elections, barring some existential change in the political process.
Speaker 2:Okay, all right. So next question. So I guess it's a two-part question, so please forgive me, you know. First part is is it quite possible that you know the we won't know the results of this election until, hypothetically, thanksgiving? You know, and in theory, if it does go until thanksgiving, what happens between now and then to everything that's you know, possibly pending between now we'll say election night and until we know who's our new president? What happens between now and then? And maybe that's a question for Leah, but what happens between now and then, right, or between November 5th and when we know declared when?
Speaker 3:Yeah, well, you know, I do think that's a definite possibility. I've done some legal work on campaigns in the past. There's all sorts of ways you know record-breaking amounts of money spent and record-breaking interest in various issues. I would, you know, also know people like Elon Musk who have gotten really political, and there's George Soros hanging out there. It's just, you know, it's kind of the Wild West of in terms of how different things have become over the past decade or two. But you know, the legal process is part of that, and we saw Bush v Gore in the past and how long that took.
Speaker 3:And what I think would likely happen in DC is it would make the lame duck a lot more complicated, because a lot of people are waiting to see how the election plays out to have their lame duck strategy in terms of trying to potentially move any legislation at the end of the year.
Speaker 3:We know that the House Financial Services Chairman, patrick McHenry, who's retiring, really would like to have a landmark piece of legislation related to crypto and is looking for opportunities there.
Speaker 3:There's also still discussion about safe banking coming into play and interchange fees are always hanging out there as part of those types of discussions as well. But not knowing the election results makes that a lot harder because, say there was a Republican sweep, democrats would would very likely want to come to the table a little bit more, because it's going to be their last chance in a few years to pass some of their priority legislation. Same on the other side, if Donald Trump is not going to be in office, republicans may see this as an opportunity to get things, things done that are not going to happen under Vice President Harris, but if we don't know the results, that that's. That's hard to navigate all of that and navigate it, navigate some of the funding fights. My prediction is probably a lot of in that situation, you know, uncertainty in DC and probably not a lot getting done in terms of any major packages until there's more information available about who won the election.
Speaker 4:Yeah, I would just add that they pushed.
Speaker 4:They pushed the the government funding deadline, the shortterm extension as late as possible into December. So they have until December 23rd to fund the government once again, and they have the option of doing an omnibus appropriations bill that covers everything, or a series of smaller bills that do to the same effect, or they can once again kick the can into the new Congress, which both sides you know both sides will tell you in private that no one, no one desires that, right, because it eats into a president's first hundred days, and if the first quarter of next year is spent dealing with last year's business, whoever's president is going to be at a disadvantage during that kind of honeymoon phase. That they do have to do something by December 23rd. They also have to pass a defense bill, which will be another potential vehicle for some of these kind of sidecar packages that Leah is referencing. But again, this is all about maximum leverage and if they don't, if neither side knows what their leverage is until two, three weeks after the election, it makes everything more difficult, right? Okay?
Speaker 2:You know. So, looking at housing, right, you know, housing is obviously something our listeners care about a great deal, and that's obviously what we do. The vice president election sorry, the vice president debate most certainly housing was arguably one of the topics they talked about the most, and even when we talked about the presidential debate, housing was one of the leading questions, and so we talked about how, if it's one of the leading questions's, this could be a question for both. Actually, it's a question for both of you. Is housing gonna continue to be in their everyday conversation? Like, is this something that you foresee them continuing to double down on as a priority, with Harris and her tax incentives and Trump with his let's open up federal land and build on them? Essentially, is that what they're going to contain to double down on?
Speaker 4:yeah, yeah, I would say yes. I mean on, I'll speak to the harris side. I mean they've been pretty consistent about raising their uh housing positions in in most every campaign stop um, it's built into the stump speech Again some more traditional incentive-based proposals around tax credits and innovation funds and significant spending of federal dollars in seeking to alleviate both the affordability and the supply side of the equation. You know they spend a lot of focus on low income and multifamily housing as well. You know I'll let Leah speak to the Trump campaign. I think that they, you know, can veer off message a little more. But I would say, you know Tim Walz, in his debate, reiterated those policy positions Again. Some of them are tricky in a divided government scenario, albeit, we will have a tax reform bill next year regardless.
Speaker 4:So I envision that in any scenario of party control that Democrats will take the position of providing some sort of tax relief for first time homebuyers as one of their opening salvos in that debate around the SALT repeal state and local tax cap, which a lot of folks on both sides would like to be dealt with, but that they will go into that discussion with some of these positions Now in a Democratic sweep scenario they hold on to the Senate.
Speaker 4:Here is when I say the House, I think all bets are off on housing in a in a positive way in some effect, where we're talking in the hundreds of billions of dollars. There are pieces of legislation out there already that individuals like chairwoman or ranking member potentially soon to be chairwoman again Maxine Waters, have proposed over the years which Harris was a sponsor of in the Senate that would make significant investments across the board in the housing space, from single family to multifamily alike. So I do think that in a Democratic scenario you're probably going to see more focus on the spending side of that equation, whereas on the Republican side you'll see more on the regulatory delinking piece. But Leah, I'll pitch it back to you.
Speaker 2:Yeah, exactly, Leah thoughts on that.
Speaker 3:Well, I will say, as someone watching the debates and listening to the news, I wish they would get more into the weeds on some of the regulatory issues. On the Republican side I think we've heard some times you know, big picture ideas that sound a little bit political to me, as you know just the average listener where there really are some good arguments. On the regulatory side, you know the vice president has been in office for the past four years and she's been the vice president while this administration has put out dozens and dozens of regulations that have made it harder for both lenders and housing providers space that many of which. You know the whole, the whole junk fees campaign and you know some of the other ideas that FHFA and other places really, I think, missed the mark on making housing more affordable and instead created some complex regulatory burdens that made it harder to operate in. I don't know that the. I don't know that the Trump campaign has really zeroed in on that, but I do think, if they were to come into leadership again, some of those conversations are happening behind the scenes. People realize that particularly places like the CFPB have become very political over this past administration and maybe some some pretty extreme changes are going to need to be made if they're going to reverse course on on some of the work that's being done there, and I do think people are thinking ahead to that if the Republicans win, probably in a way that they were not.
Speaker 3:When Trump took over last time, he truly was a DC outsider last time. This time, he's kind of in a unique position where not only is he a little bit of an insider, but he's an insider that has had four years to reflect on what he might have been able to do better to change the tides at the agencies, to be more in favor of, you know, the whatever the Republican thought process is on regulation. So it will be interesting to see how that comes together, but I don't know that a lot of that has has made it into the debates. I think the debates have gotten more into some of the weeds of finger pointing and back and forth. That isn't talking about things like the specifics of junk fees and the specifics of some of these regulations that we've seen.
Speaker 2:Yeah, can we pivot to the Federal Reserve and rates and the individual candidates opinion on that? In the past, trump has been pretty vocal on where he feels as though or thinks rates should go and what the Federal Reserve should be doing. I could be wrong, but I haven't seen him really mentioned much as of late but again, I could be wrong and I haven't really heard Harris say much about it. So, knowing that mortgages and housing is very rate sensitive, depending on the election or even as we head into that, what are they saying about rates and what are they even talking about, what rates or what they think rates should be doing and how that even impacts housing? We'll start with Trump, since he has been the most vocal. The Trump side of the fence, since he's been the most vocal about it. Is he even still talking about what the Federal Reserve should be doing with rates?
Speaker 3:To your point. I haven't heard as much about it in the last few weeks. They obviously had the cut a few weeks ago. Um it, it. You know. We're still, I think, probably not going to totally feel the effects of that for a few more weeks. I've read that it takes a little bit of time for all that to come into effect, but some of of the discussion about it being the end of the world and things like that, when it, when it first happened, that does not seem to have come to fruition. But I do think once he potentially you know, if he became the president again, yeah, I'm sure would be looking at the issue in a way that would be, you know, if he became the president again, yeah, I'm sure would be looking at the issue in a way that would be favorable to the economy that they are. He would be trying to create and keep strong, and I wouldn't be super shocked if had a different take than maybe during his campaigning.
Speaker 2:So I mean correct me if I'm wrong, and maybe during his campaigning so I mean correct me if I'm wrong, but back in like 2020, you know, he was quite vocal about where rates should go Right, and almost to the point where he would argue that he was the one who influenced the rates going down Right or he's the one who lowered rates if he's elected.
Speaker 2:Right, right, thanks. If he's elected, obviously he. If he's elected, right right, thanks. Um, if he's elected, obviously he would still want rates. Rates go lower, right, he, he's very rate driven. Um, do you foresee him doing that? Or even to that point? I mean, what powell is still in, holds that position till 26, right, is that right? Yeah, pal's in that drum. Pal pales is not in there until 26. Do you see pal leaving early? If trump's elected, you're gambling.
Speaker 4:Maybe, maybe not, who knows I, I, I mean this is conjecture, but I, I think jerome powell has proven to be pretty, uh, resilient. Resilient is the is right, I mean there were periods. If you reference uh, mean there were periods, you referenced some degree. There were periods during the first Trump administration where the pressure was, you know, was rather overt and you know the tradition has dictated that presidents do not, you know, weigh in directly with pressure campaigns on the chair of the federal reserve. Trump was an anomaly on that. Um, but he, he is not, he's not on an island.
Speaker 4:Right, there are democrats who have also called, you know, uh, for for a lowering of rates sooner, rather than the fed did, notably elizabeth warren, warren. This is one of those things where the political arc bends a little bit, but, broadly speaking, most policymakers tend to stay out of that to the degree that both Trump and Warren have kind of tried to put their thumb on the scale. And I think that Powell has shown incredible resilience and resistance to those calls. Right, if you recall, trump wanted Powell to wait until after the election to lower rates for the first time. To your point, it's an easily digestible thing.
Speaker 4:Right, when rates, you know, when the Fed lowers rates, then you know mortgage rates go down and auto loans go down and they're to follow and Trump wanted the credit for that. The Fed moved along anyway, right, and it is now kind of forecasting, you know, a few more quarter point cuts over the, you know, over the coming months. But you know, the reason Harris hasn't discussed that is because I think that you know her like Biden is because I think that you know her like Biden, their view is that the Fed is, you know, is independent and it will make decisions based off of, you know, the economic expertise of its, you know of its institution, right, and you know Trump has a different viewpoint on that.
Speaker 2:Yeah, that's fair. That's fair. We're at time, we or approaching time. Any final thoughts from either of you on the election and the direction that we may head into as the last couple of weeks of October heading into November. With regards to the election housing in the final weeks, we'll call it the mad dash Sprint for each candidate. What's yours, zach?
Speaker 4:Yeah, I mean it's going to be a race to the finish and surprise to not know the results on election night. There will be reporting in certain states that show Trump with a significant lead that may dwindle after absentee and early votes are counted. I will use Pennsylvania as an example. There will be other states where Harris will have a lead but the state itself is notoriously lagging in its vote counts, california being one of them, more so on a congressional level. But we will have a glimpse on election night and you know, if the race does go outside the margin of error on either side, then maybe we will have more certainty than we all expect. But no one should be surprised if the media is talking about this two weeks later, as, because you know, the Wisconsin Wisconsin results are in court or the Pennsylvania results are in court.
Speaker 4:I expect there to be a very litigious period following the weeks to follow the November election in any scenario, and Q4 will be kind of messy on the policymaking front. But we will have a new Congress, we will have a new president and I think if there's one thing that is certain, issues around housing policy will be front and center in this new Congress and new administration. It just may take different forms depending on who's elected. Leah.
Speaker 3:Yeah, I think that's a great point. There's still a lot hanging out there that really directly impacts ACCU members. There's this whole debate on title insurance. That really kind of just got started but it hasn't really gone anywhere yet. There's a lot of junk fee ideas still hanging out there at both the CFPB and the FTC. The whole 100-year review of the home loan bank system is really in the early stages of the RFI process. So there's been a lot that they've cracked the door open on but have not necessarily finalized regulations or made changes, and the election will definitely play a role in that.
Speaker 3:Republicans I think I saw Mark Calabria said something in the press last week bringing up GSE reform again as a Republican priority. So really, the election outcome on this industry in particular and the timing this year maybe even more so than in the past things could be going in a lot of different directions and things will probably take a little bit of time to shake out and there could be some surprises. Like we've talked about before, there's been a lot of instances where people like JD Vance have have have agreed with Elizabeth Warren on things that surprised us. So no matter what happens, there's going to be a lot going on in this space and we're also going to be friends with each other. No matter what happens, we're all going to have fun on election night, even if some of us are crying into our beards, but although we probably won't have the results that we've talked about. But there's going to be a lot to do and a lot of work for the movement and the credit union industry and just looking forward to figuring all that out after the election.
Speaker 2:Sure, I appreciate that. Now there will be states that we will know right, Like no matter what there will be. I'm not going to say a handful will know right, like no matter what there will be. I'm not gonna say a handful of states, but no matter what.
Speaker 4:There will be some states that there are clear winners, right yes, I mean there there will be 40 plus states that there are clear winners on election night.
Speaker 2:It's just these, these seven, that matter so you're saying it's literally gonna come down to like seven states that?
Speaker 4:seven states? Uh, it's. It's Michigan, wisconsin and Pennsylvania which are critical for Harris and Georgia, north Carolina, arizona and Nevada, which are all critical for Trump. Trump has more avenues to victory, harris without Pennsylvania. Without Pennsylvania and Michigan, her road to the White House gets much trickier. It's just the way that these electoral votes are proportions that are going to make for for a long night, and I would venture to guess that virtually all of those seven states fall somewhere within. You know, somewhere between half a point to two. Point outcome across the board. Point, you know outcome across the board. So to my point about, you know, litigious days to follow, plenty of fodder for the respective, you know, campaigns, attorneys to litigate, the, whatever the equivalent of the hanging chat is in 2024.
Speaker 2:Seven states we say seven's lucky right, Something like that.
Speaker 4:Going to be lucky for one of them.
Speaker 2:Lucky for one of them. Lucky for one of them. Well, leah Zach, thank you very much. As always, we appreciate everything that you do to support Acuma, our members. Again, your knowledge and insight into everything that's happening in DC is extremely valuable, so thank you very much for joining us today.
Speaker 4:Thanks, peter, good to see you.
Speaker 2:And to close out, thank you again to LenderPrice for sponsoring our policy series and all of you. We know your time is valuable. Thank you for tuning into the latest episode of Acuma's On Point podcast. We hope you enjoyed it. Until next time, be well, my friends.
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