ACUMA ONpoint
ACUMA ONpoint
Washington's Regulatory Rollercoaster Is Reshaping Mortgage Lending
The federal policy landscape is transforming at breakneck speed, with sweeping changes across regulatory agencies that directly impact credit union mortgage operations. Leah Dempsey, Shareholder at Brownstein Hyatt Farber Schreck, joins ACUMA President Peter Benjamin to unpack these developments and provide crucial insights for mortgage professionals navigating this new terrain and what to watch for in the coming months:
- New leadership at FHFA with CEOs of Fannie and Freddie replaced, and John Roscoe appointed chief operating officer.
- GSE reform appears back on the agenda with Trump administration appointees who have experience in this area
- CFPB is awaiting confirmation of Jonathan McKernan, who may take an approach similar to Kraninger era with more explicit regulatory guidance
- DOGE initiative expanding to NCUA and potentially bypassing notice-and-comment rulemaking for specific regulatory changes
- White House is considering rescinding regulations that don't align with Loper-Bright's decision limiting agency authority.
- Senate Banking Committee planning markup sessions on housing legislation in coming months, showing bipartisan interest
- The impact of tariffs creates market volatility that affects mortgage rates and potentially complicates longer-term GSE reform plans.
- Credit union professionals benefit from clear rules of the road and fair regulation tailored to their unique structure.
Stay connected with ACUMA for continued updates as these rapid changes unfold. With new leadership at multiple agencies bringing fresh regulatory philosophies, credit union mortgage professionals must remain vigilant and engaged to navigate this dynamic policy environment successfully.
Sponsored by Loan Vision.
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 Actors On Point Podcast, the policy series where we focus on policy issues impacting the credit union mortgage industry. I'm your host, peter Benjamin. Almost two weeks ago I sat down with Leah Dempsey, shareholder with Brownstein, and around that time it was right before the news broke about the changes happening over at NCUA and, unbeknownst to us, doge was coming in and making some rapid changes and, of course, the administration came in and fired the board members shortly after that. And so you know, as you go about listening to this recording and, of course, this episode, just know that you know Leah and I, you know, as we were discussing, you know, things happening over at NCUA. This is right before the news broke about the changes happening with the NCUA board. So all important information.
Speaker 2:You know we are still very much interested in how things will unfold over at the NCUA and you know we will continue to monitor that and I imagine that in our next issue, our next episode, we'll give you a full update. But let's go ahead and dive right in. We hope you enjoyed the latest episode of Actions on Point podcast policy episode. Anyways, enjoy it. Before we get to our episode, just a quick word from our sponsor.
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Speaker 2:Joining us today as our resident expert is Leah Dempsey, shareholder with Brownstein. Leah, how are you doing today? I know we've been busy Well, one, we've been keeping you busy but how are you doing?
Speaker 4:I'm doing well. Yeah, it's a little bit of a rainy, cold April day in DC, so that's a little bit depressing, but it was great to see you guys this week at the Acuma Summit and really fun to be with many Acuma members that are, you know, I think, just coming up with a lot of inspiring ideas and are just fun to always talk to and learn from. So thank you guys for having me at that.
Speaker 2:Of course. Of course, now, you said it. We were at the summit and we talked about a lot of things and one of the biggest takeaways from the summit was there's a lot happening in DC, which is obviously why we are here talk about policy issues. Now, first question out of the gate, and I think that's a very important question because I think we've really set the stage and I'm sorry for the long-winded intro to this first question, but throughout the year, here we are April, but throughout the year, it's really here we are April, but throughout the year, you know, we've it's really been an ever changing environment and I don't and you can correct me if I'm wrong, but this seems, I don't know, just thinking back to my time when, when coming into the mortgage industry, but this seems like even only four months, it's already feels like it's been a year right, at least as far as what has been accomplished by this administration.
Speaker 2:So first question out the gate is you know, from a very high level, can you just you know, can you just think about or can you tell us? You know our listeners, you know, top of mind, what's something that our listeners should really be focused on when it comes to policy issues that they should be watching that are really going to be starting impacting the credit union mortgage lender.
Speaker 4:Sure, well, I mean, there's just a tremendous amount of activity happening in the executive branch and at the agencies right now that has the possibility of impacting credit union mortgage professionals. The FHFA this week has had another extremely active week. We continue to see a ton of changes there. We saw the CEOs of Fannie and Freddie fired and replaced a number of board members. We also saw a new chief operating officer, john Roscoe, named to help lead those businesses as well. He is a former chief of staff to Mark Calabria, who worked in the prior FHFA Trump administration. So you know, we kind of continue to see a change of policy at the agencies and at the GSEs, which we will, I believe, continue to see things rolling out that are impacting the industry. We've already seen a number of announcements that have made changes to how the process is done on a number of things, and I'll get into some of that more.
Speaker 2:Can I ask a question on that real quick?
Speaker 4:Oh sure?
Speaker 2:Yeah, all right. So I mean, I'm a visual person, so I have to kind of sort of visualize this. So you have, you know what I'm assuming is going to be. You know, the CEOs of both Fannie and Freddie, and they're both going to report up to the chief operating officer and who's essentially going to act as, in many ways, a tiebreaker if there ever needs to be a tiebreaker or the filter between that CEO and Pulte. Is that essentially how it's going to work?
Speaker 4:I think so. I mean, I don't know the inner workings completely of everything they plan to do, but it appears like he is going to be taking on a day-to-day role of leading them and that you know Director Pulte is going to be working closely with him. So I would expect them to be working closely together and us to see, uh, their them kind of collaborating on a number of items in the next few months.
Speaker 2:So, and this, I mean this is someone who is, you know, a seasoned vet for all intents and purposes in Washington, right? So you, you know, it seems like someone who is is good in this position, right, you know, they know d they're, uh, is it okay to call him a dc insider? I mean, he, obviously he's been in washington, he worked underneath calabria, so it's an interesting position. Obviously he created this position, right? Um, it's interesting to see how it plays out because it's a newly created position. It's interesting to see how it plays out because it's a newly created position. It's interesting to see if the next administration carries forward this position. But from a person standpoint and an appointee standpoint, you know, it's, at least you have someone in there that understands the inner workings of that agency from the FHFA standpoint, right, so interesting, understands the inner workings of that agency from the FHFA standpoint right, so interested to see how this plays out.
Speaker 4:I would say I think my read is that this says a lot about the Trump administration's willingness to engage in GSC reform. We know that Director Pulte has been eager to spin out Fannie and Freddie. We know that former director Calabria was very eager to do that and did a lot of work on that, and I'm sure John Roscoe, in working with him, has a lot of experience in that. I personally just think that this shows just another move in some of what's going on, that that is on the agenda. It's something that the Trump administration wants to do. It's going to take some time. A lot of people have said really it's more of a 2026 item, but I believe that this is maybe part of that plan, as well as some of the things that you outlined too.
Speaker 2:I mean this, this that was actually my next question Like, does putting him in play someone who is seasoned in that sector, the housing sector and I think that's fair to say that right? Does that you know at one point in time and you can correct me if I'm wrong but at one point in time Pulte said, you know, gse reform is kind of sort of put on the back burner at this point in time. Does this in many way speed up that process? Because you now have someone who understands it, has been in the Calabria era of FHFA, understands the inner workings and now can really handle that transition. Does it speed things up a little bit? It may Without this guy. If it was someone else, it may delay it. I mean, who knows, right? But it's an interesting. It's again you know an interesting strategy, cotton. Let's see how this plays out. You know that's basically all I'm thinking about. So I interrupted you. Let's continue forward. What else should you know our listeners be focused on? That's coming out with policy.
Speaker 4:Yeah. So I mean, I would say at the agencies, other agencies as well. Hud is going through a tremendous amount of change. We're seeing cuts to not only staff but a number of their programs that they had in the past. Cfpb continues to not be fully staffed up Right now. We're still waiting for Jonathan McKernan's nomination to be agreed to by the Senate, which we think is going to happen the first week of May. But during that time we're seeing them start to roll back certain regulations and drop certain lawsuits from the Biden administration.
Speaker 4:Cfpb. But still a lot of work to be done in engaging with potential new CFPB employees and figuring out what their longer-term agenda might be with regulations such as some of the mortgage rules that would be impacting ECUMA members. So a lot to follow there. And then the FTC. They fired the two Democrat commissioners and they, just as of yesterday, confirmed another Republican. We're also hearing some rumors that the CFPB may be moving certain items over back to the FTC for enforcement or for regulation over there. So a lot to keep up on and it feels like it's changing pretty much every day at this point.
Speaker 2:Okay. So, going back to McKernan, and we talked about this at the summit and you said something very interesting when I asked you this question and so I'm going to reference you. So at the summit I said you know, mckernan is an interesting pick for this position for CAPB director. You know he is a true, you know, regulator, you know it's a good pick. But it's interesting because, for all intents and purposes, it seems as though they are trying to sunset the CFPB, which is why it's so interesting. You take an agency that, for all intents and purposes, appears as though they are trying to close down, or what everyone thinks they're trying to close down, and you put a true regulator in there. But then you said well, you have a gut feeling that he's gonna take the cpb back to.
Speaker 2:You know the um, the why am I blanking on her name?
Speaker 2:Um, the kathy kraninger era, you know, and thinking about it not, and and I I've been thinking about it ever since you said that the Kraninger era, that was actually not trying to get political whatsoever, that wasn't a bad time for the mortgage industry. She was willing to work with the mortgage industry on a lot of the issues that we had concerns about ATRQM, lo, comp, and I'm just naming a few. And so if that's his approach and willing to work with the mortgage industry, providing clarity on some of these things that we have concerns about, that's kind of sort of a win in my mind. Granted, there's also the far extreme. Hopefully it's not that far extreme, but if he's willing to provide clarity, not bad right. And again, you and I were in DC, you know, last couple of weeks ago, and that's all we've talked about is, can we just get some clarity, just give us the right direction, point us in the right direction, and we're happy. Am I reading the tea leaves right way? Am I understanding this right?
Speaker 4:I think so. I mean I think that Jonathan McKernan's been around DC for a while. He was on the Hill, he worked for Pat Toomey, who I think was a great lawmaker, and he was actually at both Treasury and FHFA. So he has been in and for a number of years and has been through a number of different presidential administrations. I think has been a very, you know, has taken his job seriously as a regulator and been a fair and effective regulator in his past work.
Speaker 4:I do think his background in the mortgage industry from his work at FHFA would be a tremendous benefit to Acuma members and some of the work that you're talking about, where there are a few regulations that are out there that could probably be improved upon. I think them going totally away could create a whole host of problems and industry has been clear that they don't necessarily ever want to go back to a timeframe when there's no regulation and bad actors are able to make things worse and then people are probably less likely to look to lenders for mortgages and people are just afraid of the system and all that's not a good thing. So I think credit unions benefit when there's clear rules of the road, fair and effective regulation that's tailored to their size and scope and unique structure as member-owned cooperatives. So I'm hopeful that Jonathan will be a good advocate for that, and I feel like he will.
Speaker 2:I mean, you said it. I mean credit unions thrive when it's an even playing field and we have clear instructions. And I think that's all we ever wanted is an even playing field with clear instructions, whereas others want a leg up right. And for those who want that leg up you and I talked about this before and you, zach, and I have talked about this before For those who want that leg up, what do they think is going to happen when the administration changes winds right or changes sides? It's going to come back tenfold and bite them in the butt. Hopefully that doesn't make this podcast explicit by me saying butt, but anyways.
Speaker 2:All right, so let's change gears, but sticking with the credit union side. But I'm also going to bring in Doge into this. I think it's an interesting topic. Now I do want to know you know, basically, Doge's role in all the agencies, but you just mentioned prior to the podcast that Doge just went to the NCUA. So walk us through that a bit, because I think this is interesting. Was this always on the game plan or is this kind of sort of a surprise?
Speaker 4:I mean I think they're going to pretty much every agency. It seems like they think that there are a number of areas of fraud, waste and abuse in pretty much every agency and that there are improvements that can be made. So I'm not I'm not shocked that they are also going to. The NCUA is a little bit less political than some of the other agencies, just because of the way it's structured in having the holdover board members. That kind of survive even after an election. But one of the most interesting things for me this week was the announcement from the White House that is apparently in coordination with Doge, talking about really taking a look at any regulation that's out there, and particularly if it doesn't align with the Loper-Bright decision, which, as a reminder to listeners, is related to Chevron and says that if an agency doesn't have clear statutory authority to engage in rulemaking, they shouldn't be doing that. And basically the White House, sort of thrown into a big mix of other press releases that they put out, noted that they are going to consider any regulation that doesn't align with Chevron and Loeppel and think about rescinding it without going through the notice and comment period. So for me, you know, as kind of an administrative law nerd. This is just a massive announcement to, not to say that the administration is going to make a number of regulatory changes without going through the notice and comment period.
Speaker 4:To me, that's like abolishing the filibuster. It's something that is a protection for businesses to raise how regulations impact them and for stakeholders to be able to provide their thoughts on what impact this would have. And, frankly, on both sides of the aisle, it's not a good thing if regulators in DC are making decisions in a vacuum without consulting industry. That was a huge criticism of the Biden administration, cfpb for not engaging stakeholders in the regulatory process, and I think the same dangers apply if the Trump administration does it. It's people that are rule writers in DC don't know the ins and outs of every single business in the country and they don't know what the Acuma members, for example, know about the inner workings of a credit union, and without that feedback, it's to me, I think, really the possibility for a number of problems, even though industry, I'm sure, would be eager to have less regulation in a number of circumstances.
Speaker 2:Very interesting, very interesting, okay. So just for the sake of time. Very interesting, very interesting, okay. So just for the sake of time. I think there's also been some movement, no-transcript, kind of shocked about that, and I know we I'm sure you're going to keep us fully updated on that as it goes forward. Because we've talked about Chevron quite a bit. We posted a policy insights on it. It was when Chevron was rolled back, we, the whole industry, talked about it. I remember seeing stuff from America's Credit Union, mba, you name it. Almost every association out there talked about it in some way, shape or form, because it was massive. It impacted not just us, it impacted every type of agency out there. I'm sure you're going to keep us fully updated as that goes on, just for the sake of time. I know we have to keep this train moving, all right. So let's go on to Congress in the housing space. What's going on with Congress in the housing space?
Speaker 4:So you know and you were up on the Hill with me two weeks ago we met with committee staff on Senate Banking Committee on both sides of the aisle. They both have indicated that they're thinking about doing a Senate banking markup sometime in the next few weeks or months, which you know. That in itself is news because in the past the Banking Committee has gone full Congresses without doing markups. So the fact that they're already committed to doing one in Senate banking is positive for movement in a bipartisan way. So continuing to keep an eye on that.
Speaker 4:The Republicans talked about some of Tim Scott's landmark legislation that he's been working on. He's been working on. He's very focused on opportunity zones. He also has a number of his own bills that I think he would like to see move. Senator Warren, who is the ranking member, is also passionate about housing and really, if there's any room for consensus in a bipartisan way in the country right now, I think it's on housing People. Still the interest rates remain fairly high and there's still a number of challenges to people that are looking to be homeowners, and members of Congress on both sides of the aisle are getting a lot of pressure on that. So we will continue to work on that and watch it, but it seems like there is at least some momentum going forward right now in Congress.
Speaker 2:Okay, and I have to ask this right Because obviously it's we were down there on Liberation Day. That's what it was called Liberation Day. So we were down there on Liberation Day. Are you hearing anything from Congress in general on the tariffs and their impact on housing? They are doing this housing markup. They're obviously voicing concerns on the impact on affordable housing. Are they saying anything?
Speaker 4:Congress is getting. I can tell you they're getting a lot of outreach from their constituents about the tariffs. It's been a roller coaster this week on the tariffs. I'm sure everyone watching the news is aware it started out that the stock market was getting close to crashing and then things looked better for a day and now things are kind of evening out and there's really a lot of mixed analysis of where that's going to go. But I will just tell you from a personal perspective.
Speaker 4:I am currently buying a home and mortgage rates when I, when I locked in, were somewhat decent compared to a few months ago. They got really good for a few days, like around the tariffs, and then, as of today, I just checked again and they're back up. So it's kind of been just all over the place. In terms of mortgage rates, which you know to my earlier point, that's one of the biggest concerns of homebuyers. So I don't know that we are totally sure yet what's? This is kind of uncharted territories. What's happening right now in the liberation day post-mortem, but to the extent that it impacts the housing market, that's going to be, I think, important in a lot of things, including GSE reform, which we talked about earlier, if we don't see things going well. After all of these tariffs, it's going to be pretty hard to spin out Fannie and Freddie in a rocky economy. So all of this over the summer, we'll see how things play out, but we are certainly living in exciting and interesting times where there are massive changes happening basically on a weekly basis.
Speaker 2:So that leads me to my next question. Right, and I don't want to be negative, because we always do our best to stay positive, and nor do I want to be political, because we do our best to stay as middle of the road as we possibly can. Now, you know, and everything that we do, but we also know that there's, you know, different branches of the government, right that that run our government, right? So what happens when you have two of the branches? You have the administration and Congress not agreeing with each other on this tariff stance, because you have, obviously, the Trump administration and he is dead set on going down this tariff path and, for all intents and purposes, it doesn't look as though he's going to pull up at any point in time or stop this train. And what happens when Congress finally says enough's enough? What happens? What happens in six to 12 months when this engine finally breaks?
Speaker 4:Yeah, and I think one thing that was interesting at the beginning of this week is when the stock market really was not doing well, I was wondering because Congress is about to go on recess for two weeks so if it had not sort of jumped back up in the last few days, I think members of Congress over those two weeks, it would have been interesting because I think they would have gotten a huge earful and who knows what actions they would have taken when they came back. Things have kind of evened out a little bit over the past day or two, but that's far from the certainty that anyone needs on these issues. So I think everyone's going to have to continue to follow it. But I do think when, to the extent that consumers and constituents, that their bottom line is impacted and their pocketbooks are impacted, that's when members of Congress hear the most from them. So they at some point, if it's not proving to be beneficial to consumers, that's when I think members of Congress start to potentially jump ship and think about their own elections two or six years from now where they have to defend some of these items.
Speaker 4:But I don't think we're quite there yet. I think things got a little bit better at the end of the week and Republicans are feeling more positive about the outlook. Um, but I far from certain and we're going to have to continue to follow it and see how things go. Okay, okay.
Speaker 2:Well, we have to start wrapping up Um any final thoughts before we actually do.
Speaker 4:Um, I think just I would encourage Acumen members to stay tuned for all of our updates that we're doing and to continue to attend the regional summits and annual meeting, because not only are things happening quickly, there's also a lot of new faces to hear from. There's also a lot of new faces to hear from, there's new directors at a lot of the agencies and a lot of people with views that people should be aware of and want to just stay closely involved in what's happening. So I would say great to talk with everyone and look forward to continuing these discussions over the next couple of months.
Speaker 2:Awesome. Well, thank you so much for everything that you do for Acuma, our community. It's always good learning from you and I guess we'll see you very soon. So again, as always, thank you.
Speaker 4:Thank you.
Speaker 2:And to close out, thank you again to Loan Vision for sponsoring today's episode and to 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.
Speaker 1: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.
