April 23, 2008

REP. BACHUS INTRODUCES REPUBLICAN HOUSING BILL
House Financial Services Committee Ranking Member Spencer Bachus (R-OH) and 32 other Republican Members and leaders introduced a housing bill (H.R. 5857).  Rep. Bachus said the bill’s goal is “to complement current public and private efforts to help struggling homeowners afraid of losing their homes” while “protecting homebuyers from predatory lending practices.”

The bill would establish new registration and licensing requirements for all mortgage originators, implement Federal Housing Administration (FHA) reforms and expand FHASecure participation, increase disclosures and housing counseling.  It also includes provisions from the House-passed bill to reform regulation of the government-sponsored enterprises.

The bill also would provide a liability safe harbor to servicers that modify loans, allow certain loan modifications to count toward Community Reinvestment Act credit, require escrow accounts for taxes and mortgage insurance on subprime loans, and temporarily raise Veterans Administration loan limits.

Committee Chairman Barney Frank’s (D-MA) housing bill (H.R. 5830) is scheduled for markup tomorrow.

REPS. CONYERS, CHABOT SEEKING MORTGAGE-BANKRUPTCY SUPPORT
House Judiciary Chairman John Conyers (D-MI) and Rep. Steve Chabot (R-OH) are circulating a Dear Colleague letter asking Members to attend a briefing designed to drum up support for AmBA-opposed legislation (H.R. 3609) that would allow bankruptcy judges to lower mortgage interest rates and cram down loan balances in Chapter 13 proceedings. 

The briefing, being held tomorrow, will include presentations from a Moody’s Economy.com economist, a bankruptcy judge, and a Georgetown law professor.

The House Judiciary Committee approved the bill in December, but it has not been considered on the House floor.

AmBA and a coalition of financial services and other business groups are running ads in Capitol Hill newspapers today against allowing bankruptcy judges to change mortgage terms on primary residences.

Bush Urges Congress to Pass One-Year Extension of 2002 Farm Bill
President Bush called on Congress to pass a one-year extension of the 2002 Farm Bill. Bush already signed a one-week extension of the law to give the House-Senate conference committee time to reach an agreement on new farm legislation. However, the president said he doesn't think a deal is likely soon.

"[T]here are no signs that the conference committee will reach agreement on an acceptable Farm Bill," Bush said in a statement. "I therefore call on Congress to provide our agricultural producers with the certainty to make sound business and planting decisions about this year's crop by extending current law for at least one year."

House and Senate negotiators, meeting minutes after the White House issued Bush's statement, said they would make a final effort to complete the new Farm Bill. AmBA continues to monitor proceedings closely to ensure that provisions to expand the Farm Credit System's lending authority are not included in that legislation. Read Bush's statement.  For more information, contact AmBA's John Blanchfield. 

Panel to Consider Waters' Housing Bill
The House Financial Services Committee will consider Rep. Maxine Waters' (D-Calif.) legislation (H.R. 5818) that would provide about $15 billion to enable states to work with housing authorities and nonprofits to buy foreclosed properties and return them to the tax rolls as affordable housing or rental units. Read about the bill.  For more information, contact AmBA's Joe Pigg.

Overdraft Protection Program Does Not Violate TILA
Consumers' payments into a bank's overdraft protection program were not credit extensions and did not violate the Truth in Lending Act, a California federal district count ruled recently. Several account-holders sued Washington Mutual Bank, alleging that the overdraft protection feature on its debit and ATM cards violated TILA. The bank would pay drafts on consumers' accounts despite insufficient funds, and then charge them for the privilege.

The consumers alleged that the policy created a credit agreement and violated TILA's prohibitions against the unsolicited issuing of credit cards and offsetting a credit card account. But the court agreed with the bank's argument that overdraft protection is not a credit feature. The fact the bank made protection payments routinely or automatically is not sufficient to imply that a contract existed and to conclude the parties had a credit agreement, the court said. AmBA filed a friend-of-the-court brief in the case. Read the decision.  For more information, contact AmBA's Greg Taylor. 

April 22, 2008

AmBA Submits Testimony on Estate-Tax Issues
AmBA strongly supports the reform of federal wealth transfer taxes in a way that promotes the interests of family-owned businesses and farms without diverting capital from job creation and other useful local-community activities, the association said in for-the-record testimony submitted to a Senate Finance Committee hearing on estate-tax reform earlier this month.

AmBA also recommended using a higher individual exemption and reduced rates; indexing the exemption levels for inflation; maintaining the current cost-basis rule; reunifying the estate, gift and generation-skipping transfer tax systems; reinstating the state estate-tax credit; and allowing the portability of credit between spouses. Read the testimony.  For more information, contact AmBA's Phoebe Papageorgiou. 

Panel to Consider Waters' Housing Bill, Frank's Measure
The House Financial Services Committee will consider Rep. Maxine Waters' (D-Calif.) legislation (H.R. 5818) that would provide about $15 billion to enable states to work with housing authorities and nonprofits to buy foreclosed properties and return them to the tax rolls as affordable housing or rental units.

The panel is scheduled to consider Chairman Barney Frank's (D-Mass.) bill (H.R. 5830) that would allow the Federal Housing Administration to refinance up to $300 billion in new guarantees for troubled subprime loans. Read about the bills.  For more information, contact AmBA's Joe Pigg. 

April 21, 2008

PRESIDENT SIGNS SHORT-TERM FARM EXTENSION
President Bush signed a one-week extension of farm programs (H.R. 5813) into law, ahead of the current law’s expiration.

Conference negotiations on the 2008 Farm Bill (H.R. 2419) are scheduled to resume tomorrow.  AmBA continues working to ensure that no provisions expanding Farm Credit System lending authority are included in the legislation. 

The AmBA-opposed card reporting proposal is still in the mix as a possible revenue offset for the bill, although there is some indication that a provision to require cost-basis reporting for securities transactions is gaining favor as an offset.

Farm Bill Negotiators Scheduled to Meet Tuesday
House and Senate Farm Bill negotiators are scheduled to meet Tuesday morning after Friday's talks on the legislation broke off without much progress. Negotiators are deadlocked over how to pay for a $10-billion spending increase for the legislation and whether to include a $2.4-billion Senate tax package. The new one-week extension of the 2002 Farm Bill signed by President Bush expires next Friday. AmBA continues to monitor proceedings closely to ensure that provisions to expand the Farm Credit System's lending authority are not included in the final legislation. For more information, contact AmBA 's John Blanchfield. 

Financial Services Panel to Consider Frank, Waters Housing Bills This Week
The House Financial Services Committee on Wednesday and Thursday is scheduled to consider panel Chairman Barney Frank's (D-Mass.) bill (H.R. 5830) that would allow the Federal Housing Administration to refinance up to $300 billion in new guarantees for troubled subprime loans. The committee also is slated to consider Rep. Maxine Waters' (D-Calif.) legislation (H.R. 5818) that would provide about $15 billion to enable states to work with housing authorities and nonprofits to buy foreclosed properties and return them to the tax rolls as affordable housing or rental units. Read about the bills.  For more information, contact AmBA 's Joe Pigg. 

Senators Urge Fed Action on Student Loans
Senate Banking Committee Chairman Chris Dodd (D-Conn.) and six other panel members last week urged Federal Reserve Chairman Ben Bernanke to use his agency's authority to ensure there is capital available to meet the demand for federal student loans during the upcoming academic year.

"We appreciate the Fed's recent decision to expand its lending operation through the creation of the new Term Securities Lending Facility," the lawmakers said in a letter. "We ask you to consider similar bold action in order to head off a potential crisis in the student loan market by allowing primary dealers to pledge federally guaranteed and AAA-rated private student loans as collateral at the TSLF."

Dodd and Sen. Bob Corker (R-Tenn.) also wrote Treasury Secretary Henry Paulson, urging him to "inject liquidity into the student loan market" through the use of the Federal Financing Bank. Read the letters. 

House Panel Approves Fee Disclosure Bill
The House Education and Labor Committee approved by a 25-19 vote a bill (H.R. 3185) that would require 401(k) service providers and plan administrators to provide complete disclosures on fees charged on such plans. The fees would be broken down into four categories: administrative fees, investment management fees, transaction fees, and other. AmBA has been working with the committee to mitigate any negative effects of the legislation, but remains concerned that the bill could add another layer of disclosure on top of new Labor Department disclosure requirements. Read more. For more information, contact AmBA 's Lisa Bleier. 

April 18, 2008

REP. MOORE INTRODUCES REGULATORY BURDEN RELIEF BILL
Rep. Dennis Moore introduced AmBA-supported legislation (H.R. 5841) that would provide regulatory burden relief for financial institutions.  The bill would provide exceptions to annual privacy notice requirements under the Gramm-Leach-Bliley-Act for financial institutions that do not share information with affiliates or that have not changed their privacy policies, and would authorize banks to offer interest bearing transaction accounts for all businesses.

The bill also would increase the ability of savings associations to invest in small business investment companies and commercial real estate loans, and would remove limits on small business and auto loans for savings associations.  In addition, it would provide flexibility in business organization for national banks and savings associations and in capital stock ownership requirement for directors of Subchapter S national banks.

These are all provisions that have passed the House.

AmBA thanks Rep. Moore for continuing his efforts to reduce the regulatory burden on banks and savings associations.

Frank Introduces Bill to Address Rising Foreclosures
House Financial Services Committee Chairman Barney Frank (D-Mass.) introduced his much-debated bill (H.R. 5830) that would allow the Federal Housing Administration to refinance up to $300 million in new guarantees for troubled subprime loans. Under the legislation, lenders first would have to substantially write down the mortgages to make them more affordable. In exchange, they would be paid from proceeds of the new FHA loans.

To qualify for the program, homeowners would have to have debts that amount to at least 35 percent of their income, and that ratio could rise to 50 percent if they showed they could make payments for six months. An oversight board could raise the limit as high as 55 percent. Currently, the FHA only insures loans for borrowers whose debts total 43 percent or less of their income. Read a bill summary.  For more information, contact A m BA 's Bob Davis.

Waters Introduces Measure to Refurbish Foreclosed Properties
In related news, Rep. Maxine Waters (D-Calif.), chairman of the Housing and Community Opportunity Subcommittee, introduced a bill (H.R. 5818) that would provide about $15 billion in Department of Housing and Urban Development-administered funds to enable states to work with housing authorities and nonprofits to buy foreclosed properties and return them to the tax rolls as affordable housing or rental units. Each state's loan and grant authority would be based on its percentage of nationwide foreclosures over the last four calendar quarters -- adjusted for the state's median home price. Read a bill summary. For more information, contact AmBA 's Bob Davis. 

Senate Approves One-Week Extension of 2002 Farm Bill
The Senate approved -- and cleared for President Bush's signature -- a one-week extension of the 2002 Farm Bill that would allow work on a new one to continue until April 25. A White House spokesman said the president would sign the extension, according to press reports.

Meanwhile, members of the House-Senate conference committee on the Farm Bill continued to search for ways to fund the legislation. Private meetings yesterday did not produce a deal as members from each chamber rejected offers from the other. AmBA continues to monitor proceedings closely to ensure that provisions to expand the Farm Credit System's lending authority are not included in the final bill. For more information, contact AmBA 's John Blanchfield. 

House Passes Student Loan Legislation
The House passed by a 383-27 vote a bill (H.R. 5715) intended to increase the availability of student loans funded directly by the government. The legislation -- introduced last week by Education and Labor Committee Chairman George Miller (D-Calif.) -- would increase annual loan limits on federal college loans for all students by $2,000. The measure also would raise the aggregate loan limits over the course of a student's education from $23,000 to $31,000 for dependent undergraduates, and from $46,000 to $57,500 for independent undergraduates. Sen. Edward Kennedy (D-Mass.) introduced a similar bill last week. Read a bill summary.  For more information, contact AmBA 's Joe Pigg. 

April 17, 2008

House Passes One-Week Extension of 2002 Farm Bill; ABA Remains Vigilant on FCS Measures
The House passed a one-week extension of the 2002 Farm Bill so that negotiations on a new one can continue after the current extension expires Friday. The Senate also is expected to approve the extension. Agriculture Secretary Ed Schafer said the White House would sign the short-term extension, but only if members of the House-Senate conference committee on the Farm Bill can agree on funding sources and accept "real reforms." House Agriculture Committee Chairman Collin Peterson (D-Minn.) also warned that he would ask for another two-week extension to finish the bill.

Meanwhile, Farm Bill conferees have reached agreement on the legislation's credit title, which does not contain AmBA-opposed provisions to expand the Farm Credit System's lending authority. But Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) -- and the conference committee chair -- said that he will accept additional amendments, and AmBA will remain vigilant to ensure that no FCS expansion measures are added.

The association, its grassroots bankers and state bankers association allies have been unrelenting in their efforts to keep both the House and Senate versions of the Farm Bill free from such FCS provisions. Those efforts have included incalculable meetings with lawmakers, five fly-ins of bankers and state executives, and more than 50,000 letters of opposition. For more information, contact AmBA's John Blanchfield. 

Trade Groups Oppose Adding Card Proposal to Farm Bill
In related news, three more trade groups joined AmBA in informing tax conferees on the House-Senate conference committee negotiating the Farm Bill that they strongly oppose using a Bush administration card reporting proposal as a revenue offset on the farm legislation (H.R. 2419) -- or any other bill. The proposal would require information reporting on payment card reimbursements to merchants.

"We believe it is inappropriate to use this provision as a revenue offset for any legislation, particularly before Congress has held any hearings on the administration's proposal or had an opportunity to fully examine its costs and benefits," the trade groups said in a letter. Read the letter. For more information, contact AmBA's Larry Seyfried. 

AmBA: Bill Would Increase the Cost of New Mortgages
AmBA opposes a bill (H.R. 5679) requiring that a foreclosure could not be started against a federally related mortgage until the lender or servicer first engaged in certain loss-mitigation activities, the association said in a for-the-record statement submitted for House Financial Services' subcommittee hearing. "H.R. 5679 would raise the cost of any new mortgage loan [because] it would undermine contract law, increase expected losses to lenders and investors, and lead to greater litigation," AmBA said. Read the statement. 

April 15, 2008

FARM BILL CONFERENCE UNDERWAY
Senate and House conferees for the Farm Bill (H.R. 2419) met, but have not reached agreements on some major issues, most importantly the bill’s funding levels and revenue offsets.  Conferees are meeting again this morning.

House conferees have offered the AmBA-opposed card reporting proposal as an offset for any additional spending levels, while Senate conferees have offered a proposal to require cost-basis reporting for securities transactions.

It has not yet been determined whether one of these revenue offsets will be included in any conference report, or if conferees will decide either to include a third option or to forego an offset entirely.

For more information on the overall Farm Bill, contact AmBA Senior Legislative Representative Seaver Sowers at 202-663-5436 or ssowers@aba.com.  For more information on the tax and revenue offset provisions, contact AmBA Senior Tax Legislative Representative Larry Seyfried at 202-663-5322 or larrys@aba.com.

April 15, 2008

USDA's Conner: Card Proposal Could Trigger Farm Bill Veto
Deputy Agriculture Secretary Chuck Conner said that the White House would consider vetoing the Farm Bill (H.R. 2419) if Congress included an AmBA-opposed proposal to require information reporting on payment card reimbursements to merchants as a revenue offset in the legislation, according to press reports.

While the credit card provision was included in the Bush administration's fiscal year 2009 budget proposal to help cut the federal deficit, it was not on a list of acceptable farm-bill revenue offsets the administration issued about a month ago.

AmBA has been fighting the card measure since February, and the association told tax conferees on the conference committee negotiating the Farm Bill that it strongly opposes using the provision as a revenue offset in the ag legislation – or any other bill. For more information, contact AmBA's Larry Seyfried. 

AmBA to Submit Connelly Testimony on Financial Education Programs
AmBA will submit for-the-record testimony by association Chairman-elect Art Connelly for the House Financial Services Committee hearing on the effectiveness of governmental and private-sector financial education initiatives. Connelly, chairman and CEO, South Shore Bancorp MHC, South Weymouth, Mass., will describe in his testimony the AmBA Education Foundation's many highly successful financial education programs, including the upcoming Teach Children to Save Day on April 29 that has attracted a record number of participating bankers. Read more about Teach Children to Save Day.  For more information, contact AmBA's Laura Fisher. 

April 14, 2008

AmBA's Efforts Pay Off as Frank, Paul Introduce Bill to Stop Internet Gambling Regs
AmBA's hard work in explaining that the 2006 Unlawful Internet Gambling Enforcement Act and its proposed regulations would be costly, unworkable and ineffective is paying off. A week after Wayne Abernathy, AmBA EVP for financial institutions policy, told a House Financial Services subcommittee that the regs make "banks and other financial institutions police, prosecutors, judges and executing marshals in place of real law enforcement officers," two key lawmakers took action.

On Friday, committee Chairman Barney Frank (D-Mass.) and subcommittee ranking member Ron Paul (R-Texas) introduced a bill (H.R. 5767) that would prohibit Treasury and the Federal Reserve from issuing the regs. Frank echoed Abernathy's testimony when he said in a statement on H.R. 5767 that "These regulations are impossible to implement without placing a significant burden on the payments system and financial institutions."

In related news, an April 10 Wall Street Journal editorial on the issue also picked up Abernathy's colorful quote that the regs would make banks "police, prosecutors, judges and executing marshals," etc. Read more.  Read Abernathy's testimony.  For more information, contact AmBA's Steve Kenneally. 

CONGRESS
Trade Groups Oppose Adding Card Proposal to Farm Bill
AmBA and two other trade groups Friday told tax conferees on the House-Senate conference committee negotiating the Farm Bill that they strongly oppose using a Bush administration card reporting proposal as a revenue offset on the farm legislation (H.R. 2419) -- or any other bill. The proposal would require information reporting on payment card reimbursements to merchants. "We believe it is inappropriate to use this provision as a revenue offset for any legislation, particularly before Congress has held any hearings on the administration's proposal or had an opportunity to fully examine its costs and benefits," the trade groups said in a letter. Read the letter.  For more information, contact AmBA's Larry Seyfried. 

Resonating AmBA Credit Union Message Prompts CUNA Concerns
AmBA's campaign to educate lawmakers, regulators and the public about the growth of new-breed credit unions and their mission desertion is causing concern at the Credit Union National Association. Because AmBA's message that such credit unions have "moved away from their original mission of making credit available to people of small means" was included in Treasury's regulatory reform blueprint, CUNA has submitted a Freedom of Information Act request seeking to uncover documents and records from banking trade groups used in the blueprint's development.

"The general public and nearly 90 million credit union members have a right to know if special interests have attempted to influence Treasury policy … in order to eliminate not-for-profit cooperative financial institutions, limit consumer choice in financial services, and deregulate the American depository institution sector in an unsafe and unsound manner," CUNA's General Counsel Eric Richards said in the FOIA request. Read the FOIA request. For more information, contact AmBA's Keith Leggett.

April 11, 2008

SEN. MCCAIN PROPOSES FHA-BASED HOUSING PLAN
Sen. John McCain (R-AZ) unveiled a housing proposal (third agenda item) during a campaign speech yesterday that would allow the Federal Housing Administration (FHA) to insure the loans of subprime borrowers that face interest rate resets, provided that loan servicers re-write the loans to near the market value of the properties and retire the remaining debt. 

The proposal, called the HOME Plan, would be available to holders of subprime mortgages on primary residences taken after 2005 if they can prove credit-worthiness at the time of the original loans and would be able to meet the terms of new 30-year fixed mortgages.  Borrowers also would need to be either delinquent, in arrears, facing resets, or “otherwise demonstrate that they will be unable to continue to meet their mortgage obligations.”

Senate Passes Compromise Housing Package
The Senate passed by an 84-12 vote its compromise housing stimulus package (H.R. 3221). The bill does not include any AmBA-opposed provisions allowing bankruptcy judges to change mortgage terms on primary residences. AmBA, state bankers associations and grassroots bankers have worked for months against such provisions, and their efforts kept changes in the bankruptcy law out of the legislation. H.R. 5720 now is expected to be considered in the House as part of a broader package of housing provisions. AmBA will continue to oppose changes to bankruptcy law and will work with House members to ensure that any new legislation is constructive. Read a bill summary. For more information, contact AmBA's Bill Boger. 

April 10, 2008

Education Committee OK's Student Loan Legislation
The House Education and Labor Committee has approved by voice vote a bill (H.R. 5715) intended to increase the availability of student loans funded directly by the government. The legislation -- introduced by panel Chairman George Miller (D-Calif.) -- would increase annual loan limits on federal college loans for all students by $2,000. The measure also would raise the aggregate loan limits over the course of a student's education from $23,000 to $31,000 for dependent undergraduates, and from $46,000 to $57,500 for independent undergraduates. Sen. Edward Kennedy (D-Mass.) introduced a similar bill last week. Read more.  Read a bill summary. For more information, contact AmBA's Joe Pigg. 

Kanjorski Introduces Bill to Address Student Loan Liquidity Problems
In related news, Rep. Paul Kanjorski (D-Pa.), chairman of House Financial Services' Capital Markets Subcommittee Chairman, introduced a bill (H.R. 5723) that would allow the Federal Home Loan Banks to provide secured advances to their members to originate student loans or finance student loan-related securities. The legislation also would permit the FHLBs to invest in student loan-related securities with their surplus funds, and accept student loans and related securities as collateral. The provisions would be in effect for two years following the bill's enactment date. The AmBA Federal Home Loan Bank Committee will review the legislation proposal. Read more. For more information, contact AmBA's Joe Pigg. 

Administration Unveils Proposal to Expand FHA Loan Program
Federal Housing Administration Commissioner Brian Montgomery outlined a Bush administration plan that would expand the FHA Secure program to help up to 100,000 more at-risk homeowners by the end of 2008. The program expansion would allow the FHA to insure new mortgages if a lender voluntarily wrote down the mortgage principal to a maximum of either 90 percent or 97 percent of the new value, depending on the borrower's risk profile, Montgomery told a House Financial Services Committee hearing.

The hearing's purpose was to discuss and make suggestions on panel Chairman Barney Frank's (D-Mass.) broader proposal to have the FHA back from $300 billion to $400 billion in restructured loans for distressed borrowers if lenders were willing to take a substantial loss on the mortgages. Frank estimated that his proposal would reach between 1 million and 2 million borrowers. Read about Frank's proposal.  Read Montgomery's testimony.  Read other witnesses' testimony. For more information, contact AmBA's Bob Davis. 

House Panel Approves Housing Stimulus Legislation
In related news, the House Ways and Means Committee approved by a 35-5 vote an $11 billion housing stimulus bill (H.R. 5720) introduced by panel Chairman Charles Rangel (D-N.Y.). The legislation would, among other things, give first-time homebuyers a tax credit of up to $7,500, repayable over 15 years; provide federal income tax nonitemizers a standard deduction of $350 ($700 for joint filers) for state and local property taxes; and authorize a $10 billion increase in tax-exempt revenue bonds to provide loans to first-time homebuyers and to finance low-income rental housing. The bill also includes a revenue offset that would require cost-basis reporting for securities transactions. Read more.  Read the bill.  Read a bill summary.  For more information, contact AmBA's Larry Seyfried. 

House Appoints Farm Bill Conferees
The House appointed 31 Democrats and 18 Republicans to serve as conferees for House and Senate negotiations on the Farm Bill (H.R. 2419).  The Senate appointed its conferees in February.  The first official conference meeting will be held this morning.

Also, the House passed, by a 400-11 vote, a Republican-offered motion instructing the House conferees not to agree to any provisions that would increase taxes in a final Farm Bill.  This could be an important development, as conferees from the House Ways and Means Committee may seek to add the AmBA-opposed card reporting proposal to the legislation as a revenue offset.

AmBA continues to work to ensure that no provision expanding Farm Credit System lending authority is included in the final bill.  We also will continue to oppose inclusion of the card reporting proposal.

For more information on the Farm Bill, contact AmBA Senior Legislative Representative Seaver Sowers at 202-663-5436 or ssowers@aba.com.  For more information on the card reporting proposal and other tax provisions, contact AmBA Senior Tax Legislative Representative Larry Seyfried at 202-663-5322 or larrys@aba.com.

NEWS FLASH:  Senate Passes Housing Stimulus Package
The Senate passed the housing stimulus package (H.R. 3221), by a vote of 84-12.  The bill does not include any AmBA-opposed provisions allowing mortgage changes for primary residences during bankruptcy.

AmBA , state bankers associations, and grassroots bankers have worked diligently against bankruptcy provisions for months.  These efforts opposing changes to bankruptcy law were successful in keeping such changes out of the housing bill.

Action on the legislation will now move to the House.  AmBA will continue to oppose changes to bankruptcy law and will work with House Members to ensure that any new legislation is constructive.

April 9, 2008

Senate Moves Forward on Compromise Housing Bill; White House Expresses Opposition
The Senate passed by a 92-6 vote a motion to limit debate on the compromise housing package (H.R. 3221), setting up a final vote on the legislation. An AmBA-opposed mortgage-bankruptcy amendment by Sen. Arlen Specter (R-Pa.) and one by Sen. Bernie Sanders (I-Vt.) to put a 14-percent cap on consumer loans will not be included in the final bill.

Meanwhile, the White House surprised senators by announcing President Bush will not support the compromise legislation. "The bill will likely do more harm than good by bailing out lenders and speculators, and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations," White House spokeswoman Dana Perino said. Read a bill summary.  For more information, contact AmBA's Bill Boger. 

Rangel Introduces Housing Stimulus Legislation
In related news, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) yesterday introduced an $11 billion housing stimulus bill that his panel is scheduled to consider. The legislation would, among other things, give first-time homebuyers a tax credit of up to $7,500, repayable over 15 years; provide federal income tax nonitemizers a standard deduction of $350 ($700 for joint filers) for state and local property taxes; and authorize a $10 billion increase in tax-exempt revenue bonds to provide loans to first-time homebuyers and to finance low-income rental housing. The bill also includes a revenue offset that would require cost-basis reporting for securities transactions. Read more.  Read the bill.  Read a bill summary.  For more information, contact AmBA's Larry Seyfried. 

April 8, 2008

AmBA OPPOSES INTEREST RATE CAP AMENDMENT
AmBA and eight other trade groups sent a joint letter in opposition to an amendment by Sen. Bernie Sanders (I-VT) that would cap interest rates at 14 percent for all consumer loans.

“Such a cap would reduce the availability of credit for those with less than perfect credit and those trying to establish credit for the first time,” the joint letter said.  “Higher rates generally apply to riskier borrowers with lower credit scores…A cap on interest rates would reduce the ability of lenders to offer credit to these borrowers.”

Sen. Sanders offered the amendment for consideration during debate on the housing stimulus package (H.R. 3221).  The Senate has not yet held a vote on the amendment, but will need to do so before a scheduled vote this afternoon on limiting debate on the overall bill if the Sanders amendment is to be included.

For more information, contact AmBA Senior Federal Legislative Counsel Bill Boger at 202-663-5424 or wboger@aba.com.

April 7, 2008

Senate Likely to Vote on Housing Bill This Week
Senate Majority Leader Harry Reid (D-Nev.) filed a motion to end debate on the compromise housing package (H.R. 3221). If the motion receives the required 60 votes, the Senate could take a final vote on the legislation. Meanwhile, the chamber overwhelmingly passed two amendments to the bill.

Senators approved by a 76-2 vote an amendment -- offered by Sens.George Voinovich (R-Ohio) and Debbie Stabenow (D-Mich.) -- that would allow money-losing companies to use already accumulated tax credits to help offset new investments in plants and equipment. They also approved by a 74-5 vote a measure -- offered by Sen. Mary Landrieu (D-La.) -- to ensure that Louisiana and Mississippi residents who received home rebuilding grants after Hurricane Katrina would not have to pay taxes on them. Read a bill summary.  For more information, contact AmBA's Bill Boger. 

April 4, 2008

SENATE TABLES DURBIN BANKRUPTCY AMENDMENT
During debate on the housing stimulus package (H.R. 3221), the Senate voted 58-36 to table an AmBA-opposed amendment offered by Sen. Dick Durbin (D-IL) that would have allowed bankruptcy judges to change mortgage terms on primary residences.  The vote means the Durbin bankruptcy amendment will not be included in the legislation.

AmBA , state bankers associations, and grassroots bankers have worked diligently against the Durbin amendment for months.  These efforts with Senators opposing changes to bankruptcy law were successful in defeating the amendment.

Senate Judiciary Committee Ranking Member Arlen Specter (R-PA) filed an AmBA-opposed bankruptcy amendment, but did not formally offer it for consideration.  We will continue our opposition to the Specter amendment to ensure that it is not included in the housing bill.

Other developments on the housing bill debate include the Senate’s rejection of two amendments concerning an additional increase in credit counseling funding and indexing the capital gains exclusion for home sales.  Also, Sen. Bernie Sanders (I-VT) offered an AmBA-opposed amendment that would cap interest rates at 14 percent for all consumer loans.  AmBA will watch developments on the amendment very closely, although it seems unlikely to be adopted. 

Debate on the overall housing package resumed this morning, and will continue into next week.  No votes will be held on Monday, and work on the legislation is expected to be completed as soon as Tuesday or Wednesday.

Senate Rejects Mortgage-Bankruptcy Amendment
The Senate rejected an AmBA-opposed amendment -- offered by Sen. Dick Durbin (D-Ill.) -- to the compromise housing bill (H.R. 3221) that would have allowed bankruptcy judges to change mortgage terms on primary residences. The 58-36 vote to table the amendment is the result of ongoing efforts by AmBA, its grassroots bankers and state bankers association allies to work with senators to oppose changes in the bankruptcy law.

As AmBA and 14 other trade groups reiterated to senators in a letter , the amendment "would increase the cost of buying a home, and thus would price some Americans out of the housing market, while making home ownership more expensive for others."

The Senate will continue consideration of the housing bill today, and there is still a possibility that Sen. Arlen Specter (R-Pa.) could offer an amendment that would allow a bankruptcy judge to adjust interest rates and waive prepayment penalties, but not restructure the principal of a mortgage loan. Read the letter.  Read a bill summary. For more information, contact AmBA's Bill Boger. 

April 3, 2008

NEWS FLASH:  Senate Tables Durbin Bankruptcy Amendment
The Senate voted this afternoon, 58-36, to table an amendment offered by Sen. Dick Durbin (D-IL) that would have allowed bankruptcy judges to change mortgage terms on primary residences.  The vote, which came after a day-long debate on the housing stimulus package (H.R. 3221), means the Durbin bankruptcy amendment will not be included in the legislation.

Senate Leaders Agree on Housing Bill With No Mortgage-Bankruptcy Provision
Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) agreed to compromise legislation to address the foreclosure crisis that does not include an AmBA-opposed provision allowing bankruptcy judges to modify first-mortgage terms in Chapter 13 proceedings.

The bill would, among other things, increase the Federal Housing Administration's loan limit to $550,000 with a 3.5 percent down-payment requirement; provide $4 billion in community development grants to purchase and rehabilitate foreclosed properties; allocate $100 million for housing counselors to reach at-risk homeowners; and allow businesses to write off losses retroactively for as many as four years.

When the Senate begins debate on the bill, Sen. Dick Durbin (D-Ill.) is expected to offer a mortgage-bankruptcy amendment. AmBA is asking bankers to call their senators at the Capitol Hill switchboard (202-224-3121) and urge them to oppose any mortgage-bankruptcy amendments that are offered to the legislation. Read key points to use with Senate offices.  Read a bill summary.  For more information, contact AmBA's Bill Boger. 

April 2, 2008

NEWS FLASH:  Agreement Reached on Housing Stimulus Package
Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) announced that they have reached an agreement on a housing stimulus/ foreclosure prevention package.  A provision to allow bankruptcy judges to change mortgage terms on primary residences is not included in the underlying text of the agreement.

“This package addresses the core issues of this crisis, including foreclosure mitigation, mortgage counseling, FHA modernization and homeowner tax credits, among other provisions,” the Senate leaders announced.  “We hope to quickly come to a consensus to move this bill to the floor, consider amendments to it, and pass strong legislation that helps struggling homeowners and our economy as a whole.”

It is our understanding that the Senate will begin debate on the agreement with an open amendment process.  Sen. Dick Durbin (D-IL) is expected to offer a mortgage-bankruptcy amendment, and Senate Judiciary Committee Ranking Member Arlen Specter (R-PA) may offer a “second degree” amendment to Sen. Durbin’s proposal.  ABA adamantly opposes the inclusion of any changes to the treatment of mortgages in bankruptcy law.

Please call your Senators and urge them to oppose including any mortgage-bankruptcy amendment in the housing package.  Talking points to use in your conversations with Senate offices are available here.  The Capitol switchboard can be reached at 202-224-3121.

The CongressDaily trade paper and other sources are reporting that provisions in the agreement include an increase in the Federal Housing Administration (FHA) loan limit to $550,000 and a 3.5 percent down payment requirement, an increased cap on mortgage revenue bonds to enable refinancing of troubled loans, an increase in the term period for which companies can write off recent losses, $4 billion in Community Development Block Grants, and increased funds for credit counseling.

The agreement also contains a provision by Sen. Johnny Isakson (R-GA) that would provide a $3500 tax credit for those who purchase a foreclosed property.

We expect debate on the housing package to continue into next week, and we will work against any efforts to add changes to bankruptcy law to the legislation.

Banking Committee Chairman Chris Dodd (D-Conn.) and panel ranking member Richard Shelby (R-Ala.) were instructed to craft the compromise bill, which the Senate could begin considering this afternoon. Reid said that Dodd and Shelby would decide whether to include the bankruptcy provisions in the compromise proposal. He added that an amendment on the bankruptcy provisions also is likely to be offered when the full Senate considers the legislation. For more information, contact ABA's Bill Boger.

April 1, 2008

Trade Groups Urge Senators to Oppose Bill Unless Mortgage-Bankruptcy Title is Removed
ABA and 13 other trade groups told Senate members yesterday that they strongly oppose the Foreclosure Prevention Act of 2008 unless its Title IV provisions -- allowing bankruptcy judges to modify first-mortgage terms in Chapter 13 proceedings -- are removed. The Senate could begin consideration of the bill today.

"There is no doubt that this increased risk and uncertainty will: (1) undermine the ability to provide new loans to those who need to get out from under existing loans they cannot afford; and (2) raise interest rates for millions of American homebuyers in the future," the trade groups said in a letter. They urged senators to support efforts to remove Title IV and to oppose the bill if it is not removed. On Feb. 28, the Senate fell 12 votes short of the 60 needed to begin consideration of the legislation. Read the letter. For more information, contact ABA's Bill Boger. 

March 31, 2008

President Bush Preparing Mortgage Relief Proposal
President Bush is preparing a mortgage relief plan that would encourage lenders to write down the principal on underwater loans and refinance them into loans with Federal Housing Administration backing, The Washington Post reported this weekend. The plan, which is similar to parts of a proposal by House Financial Services Committee Chairman Barney Frank (D-Mass.), is unlikely to be unveiled until later in April.

Senate to Consider Foreclosure Prevention Bill
The Senate this week is expected to begin consideration of foreclosure prevention legislation that includes an ABA-opposed provision allowing judges to change the terms of mortgages on primary residences during bankruptcy proceedings. Last month, the Senate failed to limit debate on the bill – in large part because Senate Republicans oppose the cram-down provisions. ABA and other industry groups plan to send a joint letter to Senators outlining our opposition to the bill. For more information, contact ABA's Bill Boger. 

March 28, 2008

FORECLOSURE BILL EXPECTED ON SENATE FLOOR NEXT WEEK
The Senate is expected to begin consideration of foreclosure prevention legislation (H.R. 3221) that includes an AmBA-opposed provision to allow judges to change the terms of mortgages on primary residences during bankruptcy proceedings.  The Senate may hold a cloture vote on the bill as early as Tuesday, April 1.  AmBA and other industry groups plan to send a joint letter to Senators outlining our opposition to the bill.

Senate Republicans successfully blocked efforts last month to limit debate on the bill and bring it to a final vote, in large part because they oppose the bill’s bankruptcy provision.

March 20, 2008

Frank Proposes 'Financial Services Risk Regulator'
Congress should consider creating a "financial services risk regulator" that would have the capacity and power to assess risk across financial markets regardless of corporate form and to intervene when appropriate, House Financial Services Committee Chairman Barney Frank (D-Mass.) told the Greater Boston Chamber of Commerce. He added that Congress also could consider empowering the Federal Reserve to act in the risk regulator role. In exchange for nonbank institutions having access to the Fed's discount window, Frank said, the regulator would have enhanced tools to receive market information, inspect institutions and limit risky practices. The intent would be to "regulate market behavior, not form," he said. AmBA is examining the proposal closely. Read more. 

March 19, 2008

MEMBERS URGE FED ACTION ON STUDENT LOANS
House Financial Services Capital Markets Subcommittee Chairman Paul Kanjorski (D-PA) and a bipartisan group of 31 other House Members wrote to Federal Reserve Chairman Ben Bernanke, urging him to take two steps that would “help to restore the stability to the marketplace for financing student loans.”

The House Members asked Chairman Bernanke to use the Fed’s authority to provide immediate assistance to non-bank lenders that issue AAA-rated Federal Family Education Loan Program asset-backed securities, and to allow primary dealers and issuers to use student loan asset-backed securities as collateral to borrow from the Term Securities Lending Facility.

BILL WOULD ESTABLISH INSURANCE LICENSING STANDARDS
Rep. David Scott (D-GA) and Rep. Geoff Davis (R-KY) introduced legislation (H.R. 5611) that would amend the Gramm-Leach-Bliley Act to establish a National Association of Registered Agents and Brokers (NARAB) that would have the authority to preempt state insurance laws in several areas.

NARAB members would not have to obtain licenses in any other state except their home states, and would be protected from having to secure non-resident licenses in any other U.S. jurisdiction.  Members also would have to satisfy the continuing education requirements only of their home states or of NARAB.

The bill would not protect NARAB members from having to comply with state market conduct or unfair trade practices regulations.  A board consisting of four state insurance commissioners and five trade association members would govern NARAB.

For more information, contact American Bankers Insurance Association Executive Director Kevin McKechnie at 202-663-5172 or kmckechn@aba.com.

Panel to Hold Hearing on Frank's Draft Bill to Address Rising Foreclosures
The House Financial Services Committee on April 9 will hold a hearing on Chairman Barney Frank's (D-Mass.) draft bill that would allow the Federal Housing Administration to refinance up to $300 million in new guarantees for troubled subprime loans. Hearing witnesses -- including regulators, academics, economists and people from communities hurt by foreclosures -- will discuss Frank's proposal and provide suggestions. Read more.  Read about Frank's draft bill. For more information, contact AMBA's Bob Davis. 

March 18, 2008
MORTGAGE-BANKRUPTCY CHANGES WOULD RAISE RATES, PRESIDENT SAYS
Giving bankruptcy courts “the authority to reduce mortgage debts by judicial decree…sends the wrong message” President Bush said in an economic address , referring to AmBA-opposed legislation that would allow judges to change mortgage terms on primary residences during bankruptcy proceedings.

“It would be unfair to millions of homeowners who have made the hard spending choices necessary to pay their mortgages on time,” the President said.   “It would further rattle credit markets.  It would actually cause interest rates to go up…This idea would make it harder for responsible first-time home buyers to be able to afford a home.”

The White House issued a fact sheet on mortgage markets and the economy following the address, including the President’s remarks on the bankruptcy legislation and outlining the Administration’s efforts on mortgage issues since this past summer.

Sen. Dick Durbin (D-IL) released a statement , disputing the President’s position and attempting to tie mortgage term changes to the vital 2005 bankruptcy reform law.

March 14, 2008

PRESIDENT WILL SIGN TEMPORARY FARM EXTENSION
The White House issued a statement saying that President Bush will sign the temporary farm policy extension (S. 2745) that Congress passed.  The statement also calls on Congress to pass a one-year extension if work on the 2008 Farm Bill (H.R. 2419) is not completed by April 18, the date the most recent extension expires.

Frank Unveils Draft Bill to Address Rising Foreclosures
House Financial Services Committee Chairman Barney Frank (D-Mass.) has unveiled a draft bill that would allow the Federal Housing Administration to refinance up to $300 million in new guarantees for troubled subprime loans. Under the legislation, lenders first would have to substantially write down the mortgages to make them more affordable. In exchange, they would be paid from proceeds of the new FHA loans. The FHA would provide mortgage insurance on the new loans, which would be sold on the secondary market.

The legislation also would provide about $10 billion in federal funds to state housing authorities so that they could work with cities to buy foreclosed properties and return them to the tax rolls as affordable housing or rental units. Frank said that he will be seeking comments on the proposal in the next few weeks and the bill could change before it is introduced. In related news, Senate Banking Committee Chairman Chris Dodd (D-Conn.) said that he would introduce similar legislation. Read more.  Read Frank's draft bill.  Read about Dodd's bill.  For more information, contact AmBA's Bob Davis. 

Card Company Execs Warn About Unintended Consequences of Reform Bill
Credit card company representatives told members of the House Financial Services' Financial Institutions Subcommittee that a credit card reform bill (H.R. 5244) -- introduced by panel Chairman Carolyn Maloney (D-N.Y.) -- could hinder their ability to offer credit. "Because we see the card industry as a highly competitive one, we do not believe that legislation setting terms and, implicitly, prices is necessary to protect consumers," Bank of America Corp. Deputy General Counsel Greg Baer said. Baer, along with executives from Capital One Financial Corp. and JP Morgan Chase & Co., defended a number of industry practices. Read witnesses' testimony.  Read Maloney's bill.  For more information, contact AmBA's Nessa Feddis. 

March 13, 2008

SENATE PANEL POSTPONES MORTGAGE-BANKRUPTCY ACTION
The Senate Judiciary Committee announced that it will postpone today’s scheduled  business meeting that included a markup of two AmBA-opposed bills (S. 2133, S. 2136) that would allow judges to change mortgage terms on primary residences.  The Committee began a markup of the bills last week, but held-over any votes.

Prior to the Committee’s announcement, AmBA and 14 other trade groups sent a joint letter to Committee Members to reiterate our opposition to the two bills.

“S. 2136, even as amended by the Committee on March 6…is not a ‘narrow,’ targeted approach to the problems in the mortgage market,” the joint letter said.  “Instead, it includes several provisions that have nothing to do with the underlying problem…  The enactment of these provisions…will lead to protracted litigation and will exacerbate the current contraction in the credit markets.”

Congress Extends 2002 Farm Bill Until April
The Senate and House voted to extend the 2002 Farm Bill another 30 days until April 18, while negotiations continue on the new Farm Bill. The 2002 law originally expired Sept. 30 and has been repeatedly extended. Members were hoping to have an agreement on the legislation before Congress leaves for a two-week recess, but progress has been slow. For more information, contact AmBA's John Blanchfield. 

Sen. Corker Optimistic About Resolving ILC Issue
Senate Banking Committee member Bob Corker (R-Tenn.) told bankers at the AmBA Government Relations Summit that he is optimistic that his colleagues will be able to resolve the industrial loan company issue. The committee on Feb. 13 approved by an 11-10 party-line vote an AmBA-supported bill to close the ILC loophole. But a provision to exempt automakers from the legislation's restrictions has "created a partisan divide" that has impeded the measure's progress, Corker said. He added, however, that panel ranking member Richard Shelby (R-Ala.) "is adamant" about closing the ILC loophole. "My guess is that very soon we'll come together" to resolve the issue, Corker said. "I want to see [the loophole] ended ... [and] my sense is that we're going to solve that problem soon."

March 10, 2008

Interchange Fee Bill Introduced
House Judiciary Committee Chairman John Conyers (D-Mich.) and Rep. Chris Cannon (R-Utah) have introduced an AmBA-opposed bill (H.R. 5546) that would require payment system companies to negotiate interchange rates with merchants. If a voluntary agreement could not be reached, a three-judge panel appointed by the Justice Department and the Federal Trade Commission would set the rates.

"By creating an impractical federal bureaucracy, this legislation inappropriately puts the government in the role of setting prices in the private marketplace ... ," AmBA President and CEO Ed Yingling said. "The result will be less competition, fewer choices and ultimately higher prices for consumers, as is always the case when government tries to fix prices." Read the bill.  Read Yingling's statement. 

March 7, 2008

SENATE PANEL BEGINS MORTGAGE-BANKRUPTCY BILL CONSIDERATION
The Senate Judiciary Committee began consideration of two AmBA-opposed bills that would allow judges to change mortgage terms on primary residences during bankruptcy, but held-over any votes on the bills until a later date.

Sen. Dick Durbin (D-IL) offered during consideration of  his bill – S. 2136, the Helping Families Save Their Homes in Bankruptcy Act – the AmBA-opposed Title IV provisions of the housing bill (S. 2636) that failed to get cloture on the Senate floor.  Committee Ranking Member Arlen Specter (R-PA) then offered his own bill – S. 2133, the Home Owners’ Mortgage and Equity Savings Act – as a substitute to the Durbin bill. 

A major difference between the Durbin and Specter bills in the bankruptcy area is that Sen. Specter’s bill would require lender consent before a loan cram-down could occur, while Sen. Durbin’s bill would not.  Sen. Durbin’s bill also contains a number of other troublesome provisions, including in the area of arbitration, among others.

AmBA and 12 other trade groups wrote to Senate Judiciary Committee Members to reiterate our opposition to any legislation that would allow judges to change mortgage terms on primary residences during bankruptcy proceedings.  We will continue working to oppose any such legislation.

No votes were held on the two bills, but they are on the Committee’s agenda for its business meeting on Thursday, March 13.  However, work on budget issues is expected to occupy the Committee’s time, and could push back consideration of the bankruptcy bills until after March.

For more information, contact AmBA Senior Federal Legislative Counsel Bill Boger at 202-663-5424 or wboger@aba.com.

REPS. CONYERS, CANNON INTRODUCE NTERCHANGE FEE BILL
House Judiciary Committee Chairman John Conyers (D-MI) and Rep. Chris Cannon (R-UT) introduced an AmBA-opposed bill (H.R. 5546) that would require payment system companies to negotiate interchange rates with merchants.  If no voluntary agreement could be reached, the rates would be set by a three-judge panel appointed by the Justice Department and the Federal Trade Commission.  The bill would apply to both credit cards and debit cards.

AmBA believes the bill, the Credit Card Fair Fee Act of 2008, would inappropriately put the government in the role of setting prices in the private marketplace, undercutting a pricing system that currently benefits consumers, businesses, and the broader economy.  The result would be less competition, fewer choices, and ultimately higher prices for consumers.

The bill was referred to the House Judiciary Committee, but is expected to be referred as well to the Financial Services Committee and possibly the House Anti-Trust Task Force.  The bill has 12 additional cosponsors.

Sen. Dole Introduces Sarbanes-Oxley Relief Act
Sen. Elizabeth Dole (R-N.C.) this week introduced the Regulatory Relief and Fairness Act (S. 2703) that would allow qualified insured depository institutions to voluntarily opt out of preparing Section 302 certifications, and Section 404 internal control management reports and auditor attestations required by the Sarbanes-Oxley Act. Dole said the costs of these requirements -- while well intentioned -- outweigh the benefits. "We can preserve the rigorous oversight of the nation's banking industry without these unnecessary and costly regulations," she said. AmBA applauded the senator's efforts to reduce the regulatory burden. Its institutions are already closely regulated, AmBA said, and this reporting is duplicative of the management reporting required under the FDIC Improvement Act. Read more.  For more information, contact AmBA's Donna Fisher.

March 6, 2008

CURIA-Lite Introduced in the House
Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) have introduced a new credit union regulatory relief bill (H.R. 5519) that includes several of the Credit Union Regulatory Improvements Act's (H.R. 1537) less-controversial provisions, as well as some new provisions. The legislation, among other things, would permit federal credit unions to add service to underserved areas regardless of the original field of membership; exclude loans to religious organizations and to businesses in undeserved areas from the member business lending cap; permit credit unions that convert to community charters to retain their select groups under certain circumstances; and allow federal credit unions to provide short-term payday loan alternatives to nonmembers within their field of membership. http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h5519ih.txt.pdf

Senator Landrieu to Introduce CURIA in Senate
U.S. Senator Mary Landrieu (D – LA) told credit union attendees of the Credit Union National Association (CUNA) Governmental Affairs Conference that she will introduce a Senate version of the Credit Union Regulatory Improvements Act.  Sen. Joe Lieberman (I - CT.) will co-sponsor the credit union bill, which is identical to the House version, H.R. 1537.  AmBA