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ACUMA ONpoint
ACUMA ONpoint
Adapting to Political Changes in Housing Policy
Witness the unfolding dynamics of the credit union mortgage industry as we unravel the potential shifts under a new administration. With expert guidance from policy advisor Annmarie Conboy-DePasquale, we venture into the anticipated changes at pivotal regulatory bodies like the CFPB and FHFA. This episode promises to equip you with a deeper understanding of how new leadership appointments might reshape housing policy and regulatory agendas, offering a historical perspective on significant policy swings with each administration change. Join Annmarie and Peter Benjamin, President of ACUMA, as they spotlight the strategic importance of appointing directors who can withstand political scrutiny amidst a continually evolving regulatory environment.
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 Actima's On 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. Price and book a demo at wwwlenderpricecom. Joining us today as our resident expert is Anne Marie Conboy, policy advisor with Brownstein AM. It's been a while. How have you been?
Speaker 3:I've been good. I'm excited to be back on the pod. It's been a pretty busy couple months since the last time I was on here, and I think just the last two weeks have been a lifetime in and of itself. In some ways, we're recording exactly two weeks from election day here, and it's certainly been a whirlwind, and I don't think the whirlwind's going to cease anytime soon.
Speaker 2:Well one. I appreciate you calling it the pod, so thank you very much for that. But yes, you are correct, it's been nonstop ever since what? November 5th, and boy do we have some good topics to go over. So let's start for the top. I think last night you and I exchanged some emails about some topics that we wanted to go over, and I think we kind of came to a good place where I think, first things first. We all know hopefully by now, everyone that's listening knows Trump won right, and one of the things that we think everyone should know is that hopefully by now, people should know that with a new Trump administration, there's going to be changes within the federal government and, in particular, there should be changes to the CFPB and FHFA, to regulators that impact housing. So do me a favor, let's start there. So what are some of the changes and some of the things that are going to impact under a Trump administration? What are some of the changes that we'll see both in CFPB and FHFA?
Speaker 3:Sure.
Speaker 3:So I think, first off, something to remember about both the CFPB and the FHFA are that they have a single director and Supreme Court law has set up that the director serves at the pleasure of the president.
Speaker 3:So we certainly expect that incoming President Trump will be replacing both the current directors of the CFPB, rohit Chopra, and FHFA, sandra Thompson. We expect that to happen pretty swiftly, in January, and because both of the agencies are led by single directors, it also makes it quite a bit easier for them to pursue a new path for their regulatory agendas. So for both of them, they will be able to move pretty quickly to find reasons to repropose or reconsider some of the rulemakings that the Biden administration undertook during the CFPB and the FHFA's past four years, which were quite busy, as we all know. One of the things that happened during the last Trump administration, just as an example, is that very quickly the CFPB moved to revisit the small dollar lending rule that had been finalized during the preceding Obama era CFPB, and that was done unilaterally by the agency without any type of prompting from Congress. So it's just an example of what we're likely to see repeated in the coming months under the Trump CFPB.
Speaker 2:So just out of curiosity, sticking with the CFPB. And then I do want to look at the FHFA. You know has, I know he's really focused on cabinet positions. You know, obviously that's the most important thing that he has to fill right first and foremost. Let's do that first. But you know has is there's, you know talks in in washington about who potentially could be that new director of the CFPB. Is there any potential front runner? Are there any rumors going around of who that potentially could be? Because I mean, it's a pretty important position, at least from the financial world, at least in my opinion it is.
Speaker 3:No, definitely You're right, peter, and I think the names that float to the top differ day to day.
Speaker 3:Quite honestly, at this point and I think we're seeing that at the cabinet level as well the names that are reported, for example, for Treasury Secretary, in the morning can differ from the ones that that arise to the top in the afternoon. We hear all these different names, these potential names, for CFPB. Is that more than almost any other agency, I think the person that sits at the top of the CFPB is really going to be a political lightning rod. The CFPB, since its inception, has swung quite wildly between administrations in terms of views on something as simple as what the agency's mandate is. So, from a policy perspective, we are expecting some pretty significant shifts, and the person who's in charge is going to, as we've seen, rohit Chopra do be willing to go to the mat with Congress. Well, I shouldn't say that, not on this Congress, because they'll all be of the same political party, but potentially further down the road, depending on what happens in the midterms. But it will have to be someone who can stand up to political scrutiny.
Speaker 2:And on the CFPB, yeah, and I agree with that. I mean I'm sorry to interrupt you but I agree with that it does have to be someone who can withstand that political scrutiny. You know from from all angles, Right, and you know even from their boss in many ways, and not to get political, but in many ways it has to be that person. But you know, when you look at you know Corddry, you know Craninger and Chopra, just to name a few, right, they all were different directors in many ways with and they approached the position and and and even the things that they were willing to, I guess, talk through or or or willing to address quite differently, right. Their priorities were very much different in every sense of the word. So I'm very much intrigued to see you know that next CFPB is what their prior, that next CFPB director, what their priority is right. Next CFPBs what their prior, that next CFPB director, what their priority is right.
Speaker 2:You know when Cranger left. You know LO comp and you know the. You know the, the idea of. You know bringing it back and kind of talking through. You know, can we renegotiate what that LO comp structure looks like? I'm wondering if that comes back with another Republican director in place who knows right? But again we'll see. But anyways, I interrupted you. I apologize.
Speaker 3:No, and on that point, Peter, a balance that whoever comes in to lead the CFPB will need to strike is what they view as the appropriate role for supervisory guidance versus what they believe the agency needs to promulgate through the more fulsome rulemaking process. And the two there's differences in how long either one can take. So, depending on where that person views the CFPB's powers and the limits of their statutory authority, it will be interesting to see where they fall on things like the CFPB's supervisory guidance from the Biden administration on when banks and credit unions can charge overdraft fees. That's one I think that that they'll need to deal with or they'll have the ability to to reverse course on.
Speaker 2:OK, ok, now let's let's go to FHFA. What do we expect coming with with Trump? Looking at Sandra Thompson and the future of FHFA? You know big position. Obviously there's talks, you know, with the regulator of our GSEs. You know this is a pretty important role for the housing finance system. Right, what type of changes are we looking at?
Speaker 3:I think we're certainly going to see less use or less reliance on advisory bulletins and supervisory letters to communicate the agency's views and priorities. That's something that we saw used quite frequently during the Biden administration and that's likely to wind down a bit under the Trump administration. They could cease to use those much at all. Fhfa, whoever comes in, is going to have to, similarly to CFPB, make some decisions on what they want to continue from the Biden administration, what they want to let go by the wayside. I think FHFA's activity on closing costs, particularly the title acceptance pilot, is something that we might see left in limbo for some time while the administration sorts out where all of its priorities fall. You know, on the GSEs, conservatorship is certainly something that we should touch on, I think given the Republican.
Speaker 2:I don't mean to laugh, right? I mean sorry, but please continue.
Speaker 3:I'll be brief.
Speaker 2:It's comical.
Speaker 3:It is going to get more chatter during the trifecta, though, so I think it's. I think you should brace yourself for that one, peter, especially if French Hill becomes the next chair of the House Financial Services Committee. He's one who has pushed legislation to end conservatorship in the past, and he certainly, should he become chair, are going to have quite a few things on his plate, and we'll be taking some cues from the administration on that. Keep in your back pocket for the next couple of months.
Speaker 2:Again it's. I would never go to Vegas and put a bet on this, right, but but why? But why would they Right? It's a cash cow. Right, the GSEs are a cash cow, you know they, they would have to replace this money somehow. Right, and what are they going to do? Raise taxes, they would have to. Right, and what are they going to do? Raise taxes, they would have to. Right, and that's not going to sit well.
Speaker 3:So, especially as they look to the expiration of quite a bit of the Tax Cuts and Jobs Act this year. So, to your point, I wouldn't place any money on them actually exiting conservatorship anytime soon. But as you know, peter, a lot of things get airtime in Washington that don't end up actually moving anywhere.
Speaker 2:I know, but just stop talking about it.
Speaker 3:We can move on.
Speaker 2:I know, but they need. Washington just needs to move on. Let's just stop talking about it. Come on, they make them up. They make, they make the country a lot of money. You know, they help with taxes. Let's just move on. Right? They're not hurting anybody. If it wasn't for the GSEs being in conservatorship, you know, instead of interest rates being, you know, 7% or 8%, they would be, you know, 9% or 10%, right? That's the truth of the matter, right? Interest rates. Gses are not in conservatorship right now and, honestly, the ones that are pushing for GSEs to exit out of conservatorship would be, in my opinion, are the big banks, because they just want to compete against them. Again, my opinion. But that's just me. Anyways, I'll get off my soapbox, because it's not about me being on my soapbox. Please continue.
Speaker 3:No, I think, Peter, you know you're deploying a lot of logic right now, and logic unfortunately does not always permeate in the halls of Congress. But it doesn't mean we should stop trying.
Speaker 2:But one day, one day we'll sink in.
Speaker 3:One day, one day one day.
Speaker 2:OK, anything else on FHFA.
Speaker 3:I think those were the quick hits.
Speaker 2:OK, ok. So another big topic, and this one's going to be quite interesting. I think this is something that actually I just came back from an event in Oklahoma and this was actually a point of conversation, so I'd love to get your opinion on it the one party system and the impact on housing. So walk us through that. How is it, how is that one party system going to impact housing overall? And we have four years of not enough four years, but we have right now a Republican House, a Republican Senate and a Republican administration and, primarily, the Republican judiciary system. So let's let's walk through this.
Speaker 3:So, yes, for the next two years we have confirmed the one party system. I will say it's important to remember in the House, republicans are going to have very slim margins, which we've seen be a point of struggle for them over the past Congress. The slimmer your majority, the harder it is to to move legislation and to govern really. So it'll be very interesting to see Mike Johnson, who's expected to remain House Republicans leader, how he's able to work with the House Freedom Caucus and his relationship with President Trump seems to be quite close and it'll be an interesting couple months for for all of the Republicans. There's also a new Senate majority leader, john Thune. Not to get off topic though the one party system, get off topic though the one party system. First of all, the administration has the ability to move its priorities both theoretically through the Congress and definitely through the regulators. So they have that two pronged approach. The fact that they control both chambers of Congress means that Republicans can both quite effectively pull back rulemakings that were finalized at the end of the Biden administration through a tool called the Congressional Review Act. And the interesting thing about the Congressional Review Act is that if you successfully repeal a rule under that method, the agency that promulgated it is also barred from creating a substantially similar rule in the future. So not only does it make it as if the rule that's pulled back never existed, it also prevents future rulemakings that are substantially similar in nature. And the fact that Republicans control both chambers of Congress also means that they can use budget reconciliation, which is a very powerful tool for moving a whole range of policy priorities. There are a lot of nuances to the budget reconciliation process. It'll certainly be used to move quite a significant tax package next year, but it also can contain certain other policy priorities Separately.
Speaker 3:The administration is going to freeze everything that's in process at the regulators. The day that President Trump takes the oath of office, they will freeze all the pending rulemakings, all the regulators. The day that President Trump takes the oath of office, they will freeze all the pending rulemakings, all the rulemakings that are final but not yet submitted to the federal register, and all the rulemakings that are in the federal register that haven't taken effect yet. So essentially, anything that the Biden administration has done from, let's say, early August until the end of the year is going to be halted and reviewed, potentially rolled back. So that takes out quite a chunk of activity that's potentially on the chopping block. And another way that they can look at reviewing regulatory matters from the past few years during the Biden administration is that, because they control the appropriations process, they can put language into the appropriations bills that prevents regulators from enforcing final rules that would otherwise be in effect. And this doesn't take the rules off the books. It just means that there won't be any enforcement actions taken with regards to those rulemakings.
Speaker 2:So one, I appreciate the poli-sci education? No, no, I truly do. I truly do so. Ok, I'll use, you know, the credit score model as an example. Right, something that Sandra Thompson and the current FHFA have pushed through. Right, something that Sandra Thompson and the current FHFA have pushed through right, If that is right now they're obviously testing it and that is not due to be fine. I guess it's technically you're not. 2025 is the requirement to go live. Right, if I remember correctly, end of 2025. In theory. Second, trump hits office right and a new director is in place. So I'm understanding you correctly. That new director could say I don't like this, and Trump could basically say I don't like this, we're not doing the same.
Speaker 3:It's a little bit more complicated, but in theory, yes. Since that effective date is further out in the future, the administration can say you know what? We need more time. We're going to push the effective date off even further than it already is, or we could hold an effective date indefinitely. There are quite a few tools that they have for preventing something from coming fully into effect.
Speaker 2:So if you were and I won't hold you to it I promise, I promise I won't. Maybe I will, but I promise I won't. If you're thinking about a housing, some type of housing legislation or something like that that that's pending right now from the Biden administration and if you were, if you were to say that there was one thing, one or two of them that are that are on the block right now, that that more than likely is going to get held up by the Trump administration, what would that be for housing?
Speaker 3:I would say and I think this is jumping ahead a little bit but on the regulatory front, the FTC's effort on junk fees is certainly going to be something that, even if they push out a final rule now, we are well within that period where it's going to be held up. And similarly, on the CFPB, the RFI on mortgage closing costs, we were expecting to see a proposed rule come out in December. At this point, if they put it out, it really won't be much more than a marker for a future Democratic administration to look at, since it would only be a proposed rule, or if it stays in the RFI form, the administration is really under no obligation to continue moving forward with that. They could leave that as is entirely unfinished on the legislative front, but isn't?
Speaker 2:that somewhat bipartisan though Like like Republicans are having some Republicans come out and said you know, we kind of agree with this junk fee out and said you know, we kind of agree with this junk fee crusade.
Speaker 3:I mean, it's junk fees is an interesting one, especially because JD Vance is the vice president and he has been in some cases praising Lena Kahn for her efforts on junk fees. I think we wouldn't see them likely move forward exactly as they are. I think I wouldn't be shocked if we see a different version of them, but I don't think they would move forward with exactly what the Biden administration would have.
Speaker 2:Okay.
Speaker 3:I think it's more likely that it's tailored and targeted.
Speaker 2:Okay, so you know, because right now, as is, you know, troopers really hinting at that one fee to rule them all. But and you're saying, and you would say, if it was up to JD Vance, he would most certainly pull that back and reframe it in a different fashion.
Speaker 3:Right, I think we would expect some shifting on framing.
Speaker 2:OK, OK.
Speaker 3:And on the legislative side, I just wanted to note that Tim Scott, who will be the next chair of the Senate Banking Committee, put out his own housing package during the fall and that gives us some indicators of what his priorities will be in that space next year. Again, I'll be interested to see some of the more concrete housing proposals coming out of the Trump administration and where they view legislation as necessary to support that. But Scott had quite a few things in his package. He wants to expand the definition of manufactured housing, he wants grants for housing construction to go more towards economically distressed areas and he wants more oversight of housing counseling services, particularly for borrowers who are more than 60 days delinquent on their government originated mortgages.
Speaker 2:Okay, Okay, you know anything else. You know regarding the the one party system and impact on housing, like any curve balls that we potentially could see out of this Um, I mean, obviously there's the concern with regards to the impact on, you know, new construction, um, that that's been vocalized by a lot of economists. But you know, outside of that, you know from the policy standpoint. You know anything that you're that you're hearing we should really be paying attention to.
Speaker 3:If I can get slightly macro for a moment please do please.
Speaker 3:I think the first hundred days of the Trump administration there's going to be a lot of time spent on actually getting nominees into the posts that they were selected for and work can certainly begin at agencies.
Speaker 3:Transition teams are already working, but getting that top dog actually in place is helpful and also A number of nominees who've been selected by the incoming administration. They're expected to have somewhat rocky roads to confirmation and some, hopefully, will move quite easily, but I think some of them it's going to be kind of a long and potentially contentious road here. The other thing is that government funding is still looming over us right now. If they're able to get through full year appropriations before the end of December, that frees up a lot of time and resources for the new Congress to focus on getting going on the Trump administration's agenda and the new chairman's agendas for the House Financial Services and Senate Banking Committees. If they have to punt appropriations into the spring, that will eat up time in the new year and take away time from other priorities and I think by the time we record the December podcast we should have a better sense of where things stand on that. But another thing just that's out in the ether there right now is that uncertainty Okay.
Speaker 2:Yeah, fair, fair, fair. All right, moving on to the next topic, just for the sake of time. I know we already addressed it, but you and I discussed the quick update on junk fees. You already brought it, but you and I discussed the quick update on junk fees. You already brought it up. Is there anything else on the junk fee crusade?
Speaker 3:Is there anything that our listeners should be paying attention to? Just to your point, peter junk fees are a very easily digestible talking point for politicians. So I don't see the kind of crusade against junk fees going away entirely, but I do think we'll see it take somewhat of a different shape under the Trump administration, and exactly what that will look like really depends quite a bit on who is in charge at the CFPB and who is in charge at the FTC. But I don't think it's going away. I just think we'll see it shape shift a bit.
Speaker 2:All right. Last topic, for just for the sake of time. You know one of our favorite topics, trigger leads. What's the latest and greatest happening with trigger leads?
Speaker 3:So I'm not sure if you all have discussed it on the podcast before, but the Homebuyers Privacy Protection Act is oh, I was blue in the face.
Speaker 3:Fantastic. So the latest is that the National Defense Authorization Act, which is the big annual defense bill. There is an informal conference process going on right now to reconcile the two versions of that bill that exist, the House version and the Senate version. Ultimately, a version of the NDAA will become law before the end of the year. Basically, the only things that are certain in Washington are life, death, taxes and the NDAA.
Speaker 3:The NDAA has become in some ways a Christmas tree bill and that a lot of other policy priorities can get hung on it in certain years not every year, but does appear that way this year. So that legislation is included in the Senate version of the bill and one of its sponsors is Jack Reed, who is the top Democrat on the Senate Armed Services Committee, and the bill itself is bipartisan. So it bodes well for its inclusion in the final version of the bill, but negotiations are still ongoing. We're hoping to have final text the week of Thanksgiving, so that should kind of be the definitive answer on its inclusion. Right, we're on the Senate. Was Reed and Hagger definitive?
Speaker 2:answer on its inclusion. Right, we're on, the Senate was a read, and Haggerty right, Yep, Okay, Good, Good, Good. So shortly after Thanksgiving we'll know more. That most certainly is an interesting one. You know that that is a good example of how you know the mortgage industry kind of did it to ourselves. A good example of how you know the mortgage industry kind of did it to ourselves. And you know, here we are, you know kind of needing a bill to kind of bail ourselves out and it's sad, but we did it to ourselves All right, Well, that's awesome. So any final thoughts before we kind of end the pod.
Speaker 3:I'll just add, peter, I know the election cycles can be full of turmoil. Something that I like to look at as a touchstone is that every election, the state of Vermont publishes every single write-in vote that it received for the presidential election. So I just wanted to share with you a couple of my favorite write-ins from this cycle. So Connor Roy from Succession, clark Griswold from National Lampoon's Family Vacation, ed Sheeran, who is not an American, pedro from Napoleon Dynamite, tia Matt, who apparently is a fictional dragon queen from Dungeons and Dragons. And then somebody wrote in and I'm quoting this from the ballot Anyone else but someone who's on this list. End quote. So if you're ever feeling, you know, like there's no brevity in politics today, I would encourage you to take a look at Vermont's published list of write in candidates. It never disappoints.
Speaker 2:Thank you for that Good good. That's probably the best final words on the policy podcast that we've ever had, so thank you very much for that.
Speaker 3:No, I'm happy to share, share the joy.
Speaker 2:Well, and we appreciate you being on the pod today and, as always, we appreciate what you and the rest of the Brownstein team do for us and our members, so thank you very much.
Speaker 3:Thank you. We love working with you guys. It's always fun to be on the pod, okay, awesome.
Speaker 2:And to quickly close out, thank you again to LenderPrice for sponsoring our policy series and to all of you. We know your time is valuable. Thank you for tuning in to the latest episode of Acuma's On Point podcast. We hope you enjoyed it.
Speaker 1:Until next time, be well, my friends. Thanks for listening. We'll see you next time at the Acuma On Point podcast. If not already, be sure to subscribe and give us a five-star rating For more great episodes and information. Be sure to visit us online at acumaorg and to get the latest updates. Head over to our LinkedIn page.
