National Updates

Last week, Consumer Financial Protection Bureau (CFPB) Director Kraninger provided her semi-annual report to Congress. Director Kraninger testified before the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee to discuss current updates and developments at the Bureau.

Director Kraninger provided testimony on the CFPB’s new innovation policies that were recently announced and symposiums hosted by the Bureau on behavior economics, and defining “abusive practices or acts” under the Dodd-Frank Act. Additionally, Director Kraninger provided some insight on the qualified mortgage (QM) patch. She explained that the QM patch will expire in January 2021 and that the Bureau is working on a plan as the transition to end the QM patch is forthcoming. Director Kraninger also expressed that the Bureau is working to increase access to mortgages. One of the major topics also discussed was whether the Bureau is constitutional based upon its structure, and recently the Supreme Court has agreed to hear a case on the matter.

NAR is continuing to monitor updates and new developments from the CFPB.

This week, the U.S. House of Representatives passed H.R. 2315, the Corporate Transparency Act of 2019 with bipartisan support by a vote of 249-173.  The anti-money laundering (AML) legislation is designed to stop the formation of anonymous shell companies created under state law that are often used by bad actors to launder money or to commit other illicit financial crimes.  

The legislation requires corporations and limited liability companies to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of the Treasury, when an entity is formed under state law. The beneficial ownership federal database will be maintained by FinCEN and will be accessed only by regulators and law enforcement.  The legislation must still be considered by  the U.S. Senate and signed by the President before it can become law, but this type of reform has cleared a major hurdle in the House.  

Anti-money laundering reforms, such as the disclosure of beneficial ownership information and additional reporting by law enforcement and FinCEN to Congress on the effectiveness of various AML protections, are top bipartisan priorities for lawmakers in both the House and Senate.

NAR will continue monitoring anti-money laundering reform efforts in Congress and by the Administration. Stay tuned to www.nar.realtor/moneylaundering for the latest updates.

On Thursday, October 31st, the House Financial Services Committee approved H.R. 4634, the “Terrorism Risk Insurance Program Reauthorization Act of 2019,” introduced by Chairwoman Maxine Waters (D-CA). This bipartisan bill would reauthorize the Terrorism Risk Insurance Program (TRIP) for seven years. The bill did not make changes to the structure of TRIP, but does include a requirement for a study on cyber terrorism, an emerging threat.

TRIP provides a government backstop for insured losses as the result of a terrorist attack, and since its original passage in 2002 has allowed private insurers to keep terrorism coverage affordable and available in the U.S. Terrorism insurance is often a necessity for commercial real estate to get financing, and provides stability to the commercial real estate sector and the economy. The legislation is expected to be voted on by the full House in the near future. The current TRIP will expire at the end of 2020 unless Congress reauthorizes it.

NAR sent a letter of support for the bill to the House Financial Services Committee members, stressing its importance to commercial real estate and the economy. NAR is a Steering Committee member of the Coalition to Insure Against Terrorism (CIAT), comprised of industry stakeholders who are committed to ensuring TRIP’s reauthorization before the end of 2020.

THE COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS will meet in OPEN SESSION to conduct a hearing entitled “Housing Finance Reform: Next Steps.” The witnesses will be: The Honorable Steven T. Mnuchin, Secretary, U.S. Department of the Treasury; The Honorable Benjamin S. Carson, M.D., Secretary, U.S. Department of Housing and Urban Development; and The Honorable Mark A. Calabria, Ph.D., Director, Federal Housing Finance Agency. The live stream can be viewed here.

WASHINGTON (September 5, 2019) – National Association of Realtors® President John Smaby issued the following statement commending the Trump administration for its efforts to reform America’s housing finance system. The White House this afternoon released a proposal to reform operations of the Government Sponsored Enterprises and the Department of Housing and Urban Development that it had been working towards since the President made the issue a top priority earlier this year.

“The National Association of Realtors® thanks President Trump and his administration for initiating thoughtful, genuine effort toward housing finance reform. We look forward to reviewing the proposal in more detail and are optimistic that, at a minimum, the White House’s efforts will shed light on the remaining mile markers on the path to reform, along with the critical role the GSEs and Federal Housing Administration play in America’s housing market,” said Smaby, a second-generation Realtor® and broker at Edina Realty in Edina, Minnesota.

“NAR continues working with the White House and Congress as we move closer to securing palatable, pragmatic improvements to our housing finance system, and we maintain our belief that NAR’s blueprint for GSE reform represents the best path forward for this system and our economy. Our proposed utility model, as any successful reforms must, highlights competition, protects taxpayers and remedies the failures of the pre-crisis system while ensuring equal access for responsible, mortgage-ready Americans in every market, safeguarding the role the GSEs were intended to play in our housing market.”

The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

NAR Educates Congressional Staff on Data Privacy Priorities

On Friday July 12^th NAR staff participated in a congressional staff briefing hosted by the Main Street Privacy coalition to educate them on how small businesses collect and handle customer data.  The coalition set forth six principles that they wish to see in any federal data privacy law.

These principles include:

• No Exemptions: Every industry sector that handles consumer information should have legal obligations to protect consumer data under the law.
• Direct Legal Responsibilities: Small businesses should not need to apply privacy standards on other businesses through contracts.  All businesses that handle private data should have their own, direct legal obligations under the law.
• Responsibility for Conduct: Any privacy law should make businesses responsible for their own conduct – and not expose other businesses, including contractors and franchises, to liability for the transgressions of a business partner. Finally, we believe that any privacy policy should include a data security standard for businesses as well as a uniform process for notifying customers about data breaches.
• Allow Customer Services and Benefits: Any federal data privacy framework should preserve the ability of consumers and businesses to voluntarily establish mutually beneficial business-customer relationships and set the terms of those relationships, thus maintaining the option to offer rewards and loyalty programs.
• Consumer Transparency: Consumers deserve to know what categories of personal data businesses collect and how that data is used.
• Federal Standard: There should be federal policy on data privacy that protects consumers in a nationwide, uniform and consistent way.

On June 12, 2019, by a unanimous vote of 59 to 0, the House Financial Services Committee approved HR 3167: the National Flood Insurance Program (NFIP) Reauthorization Act, sending the bill to the U.S. House of Representatives for consideration.

The NFIP Reauthorization Act would extend the program for five years and include significant reforms to strengthen flood mapping, enhance mitigation investments and remove several barriers to private flood insurance options. It easily cleared the first hurdle of the legislative process because it was the product of extensive, bipartisan negotiations between Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC).

NAR supported committee passage because the bill represents a long-term solution to NFIP and a breakthrough of the two-year deadlock that has resulted in 12 short-term extensions and two brief lapses so far. The bill is not only a sensible, bipartisan pathway forward, but also includes numerous NAR-championed provisions and is consistent with long-standing NAR policy principles.

Next, the House of Representatives must vote on the measure but the timing is not yet clear. NAR will urge the House to take up the NFIP Reauthorization Act at the first available opportunity and move the bill to the United States Senate. Currently, NFIP’s flood-insurance-writing authority is next set to expire on September 30, 2019.

NAR’s Letter of Support (Opens in new window)

HR 3167, The National Flood Insurance Program Reauthorization Act (Opens in new window)

Section-by-Section Committee Summary (Opens in new window).

The President is expected to sign H.R. 299, the “Blue Water Navy Vietnam Veterans Act.” This legislation includes language which will eliminate the cap on the VA home loan guarantee. Veterans, under this legislation, will be able to purchase any home they qualify for using the VA home loan (with zero down payment).
As introduced, the legislation would slightly increase some of the guarantee fees for all veterans using the VA loan program, in order to pay for the healthcare component. NAR opposed this language, and in conjunction with other groups, was able to mitigate the impact of these increases. NAR will continue to work with the VA on implementing the loan limit provision and assuring all veterans have access to the home loan benefit.

On June 6, 2019, the National Flood Insurance Program was extended to September 30, 2019. The extension was attached to a broader disaster aid package, HR 2157. 

In addition, House Financial Services Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) unveiled long-term reauthorization and reform legislation, and scheduled a markup for Tuesday, June 11, 2019. In the links listed below you will find the bill text, an amendment in the nature of a substitute (AINS), and a section-by-section summary.

NAR issued the following Press Statement on the bipartisan flood insurance agreement:

“The National Association of Realtors® applauds Chairwoman Waters and Ranking Member McHenry for working towards a bipartisan, long-term solution for the National Flood Insurance Program,” Smaby, a second generation Realtor® and broker at Edina Realty in Edina, Minnesota, said. “This legislation addresses many critical NAR priorities, including long-term reauthorization, strengthening mapping and mitigation, and facilitating a more robust private insurance market. While we continue reviewing this bill, NAR thanks the Chairwoman and Ranking Member for their genuine efforts to move comprehensive reauthorization legislation forward.”

For additional information, please visit the National Flood Insurance Program page.

On May 8th and 9th, the House Financial Services Committee held a full committee markup and considered legislation aimed at combating money laundering and strengthening laws to better help law enforcement get to individuals who are engaging in illicit financial crimes. The House Financial Services Committee held hearings back in March of this year to discuss current anti-money laundering efforts and proposals to modernize money laundering laws.

This week, the Committee was scheduled to take up the “Corporate Transparency Act of 2019,” which would require limited liability corporations (LLCs) and s-corporations formed under state law to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), which is a bureau within the U.S. Department of the Treasury. This bill was not considered during the markup as initially planned. The “Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019,” or the COUNTER Act is legislation to reform the Bank Secrecy Act (BSA), which included proposals to expand the current Geographic Targeting Orders (GTOs) issued by FinCEN.

In a letter, NAR expressed our support of the Committee’s work to promote greater transparency through the collection and reporting of beneficial ownership information to FinCEN, when LLCs are formed under state law in an effort to combat money laundering.