As the National Association of Home Builders (NAHB) celebrates National Homeownership Month in June, more than two-thirds of Americans believe that owning a home is an essential part of the American Dream. “Americans continue to place a high priority on homeownership and work hard to achieve this goal for their families,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “Our members are committed to providing high-quality homes that meet the diverse needs of Americans across the country.”A key component in the ability of families of all income levels to become home owners is the mortgage interest deduction, which has been a cornerstone of American housing policy since the inception of the tax code more than 100 years ago. The deduction primarily benefits middle-class taxpayers, according to data from the Congressional Joint Committee on Taxation. NAHB supports this tax incentive, as well as provisions that encourage development of affordable housing. Yet, with the national homeownership rate stalled near 64%, NAHB must continue working to address the obstacles for many potential home buyers. “We have long fought for sensible reforms to burdensome regulations that needlessly increase the cost of homes for low- and middle-income families,” said MacDonald, noting NAHB research that shows government regulations add about 24% to the cost of housing. During National Homeownership Month and throughout the year, NAHB and its 700 state and local affiliates work hard to make affordable housing a reality and that it continues to be a priority to our nation’s leadership. NAHB commissioned a nationwide survey by the polling firm Morning Consult of more than 11,300 registered voters earlier this year that found more than 70% of these respondents place a high value on homeownership. “We must support the dream of homeownership and not create barriers through unnecessary federal regulations or tax code changes,” MacDonald said.
Trump renews $1T pledge as White House kicks off ‘Infrastructure Week’
President Donald Trump’s administration will hold infrastructure-themed events around the country this week as part of a growing push to promote a $1 trillion plan to revamp the nation’s crumbling network. “It doesn’t matter who you are, whether you are farmer in the Midwest, or a mother driving your kids to and from school, or a worker or a college kid flying back and forth to school, you’re affected by infrastructure,” White House economic adviser Gary Cohn said during a conference call. The promotional tour begins Monday at the White House, where the president will lay out a plan to revamp the country’s air traffic control system, the Associated Press reported. Trump will reportedly recommend that air traffic control operators at airports operate autonomously from the Federal Aviation Administration. Trump will travel to Ohio on Wednesday to discuss planned updates to critical dams and levees, and then return to the White House on Thursday to meet with governors and mayors about how best to locally implement taxpayer dollars on infrastructure projects. Finally, Trump will chat with the Transportation Department about potential regulatory reform related to permits for railway and road construction.
An overhaul of America’s public infrastructure was a key element of Trump’s platform in the building to the 2016 election. He was highly critical of the state of the country’s major airports, highways and bridges. Trump’s proposed plan calls for an influx of $1 trillion in infrastructure projects through a combination of public and private funding. Reforms to streamline the permit process and renovate existing structures are considered crucial to Trump’s vision, though the president has yet to provide many specific details about how the plan will ultimately unfold. “There’s a great of interest in Congress in doing this,” Vice President Pence said during a March meeting with key executives and administration aides, according to the Wall Street Journal. “But there’s also just as much interest in listening to leaders in the private sector to identify the capital and identify the needs to be able to finance this in a way that really captures the energy of the American economy.” Through early June, the infrastructure plan had taken a backseat to other key Trump projects, including an attempted overhaul of the healthcare system and tax structure. Democrats have widely opposed the notion of private involvement in infrastructure projects, which are traditionally funded by taxpayers.
Regulations impact credit unions
Putting an end to remarks from the Consumer Financial Protection Bureau that its regulations are, in fact, helping credit unions, the Credit Union National Association published a detailed report that outlines exactly how the new rules have suffocated growth. CUNA is a national association that advocates on behalf of all of America’s credit unions, which are owned by more than 100 million consumer members. CFPB Director Richard Cordray has commonly gone on record to denounce doomsayers who say that new regulations are killing the banks, especially when it comes to credit unions and community lenders. In response, CUNA submitted a letter to the CFPB detailing each of the ways the agency’s rulemakings have affected America’s roughly 6,000 credit unions. The letter also includes recommendations on how the bureau can improve its regulations to provide relief to credit unions and their members. “We urge the bureau to take immediate action and implement our suggestions for the protection of credit union members, who have fewer choices and are incurring increased costs due to CFPB rules,” said Jim Nussle, CUNA president/CEO. “CUNA, our state league partners, and credit unions—the original consumer protectors—stand willing to provide the CFPB any further details or analysis necessary to achieve regulatory relief, the ultimate goal of our Campaign for Common-Sense Regulation.
The CFPB continues to cite the very minimal accommodations it has made in some rules for credit unions,” Nussle explained. “However, in practicality, credit unions’ ability to provide top-quality and consumer-friendly financial products and services has been significantly impeded by a one-size-fits-all regulatory scheme that favors large banks and less regulated nonbank lenders—institutions that have more resources for overly complex compliance requirements,” he said. While CUNA is are pleased to hear that the CFPB recognizes the very important role credit unions play in serving consumers, there are still plenty of areas to improve on, which is outlined in the letter and recommendations. According to CUNA’s Regulatory Burden Study, it found that in 2014, regulatory burden on credit unions caused $6.1 billion in regulatory costs, and an additional $1.1 billion in lost revenue. And this data doesn’t even include the CFPB’s recent regulatory additions to the Home Mortgage Disclosure Act (HMDA) and Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) requirements. “The CFPB regularly cites modest thresholds and accommodations it has provided in some mortgage rules and the remittances rule as proof that it is considering the impact its rules have on credit unions and their members,” the letter stated. “Regrettably however, credit unions continue to tell us that the accommodations the CFPB continues to cite are not sufficient exemptions and they do not fully take into consideration the size, complexity, structure, or mission of all credit unions.”
The letter breaks down the following four categories:
- Ability to Repay/Qualified Mortgage (ATR/QM)
According to a recent survey of CUNA members, 43% cited the QM rule as most negatively impacting the ability to serve members with mortgage products. So even though the bureau commonly cites the expanded qualified mortgage (QM) safe harbor for small creditors as proof that it has helped credit unions continue to serve members, CUNA explains that it did not provide full relief for many credit unions.
- Mortgage servicing
The CFPB claims that it has tailored its servicing rules by making certain exemptions for small servicers that service 5,000 or fewer mortgage loans, but the latest survey results from CUNA members say otherwise. In the recent survey, more than four in 10 credit unions (44%) that have offered mortgages sometime during the past five years indicate they have either eliminated certain mortgage products and services (33%) or stopped offering them (11%), primarily due to burden from CFPB regulations.
- Home Mortgage Disclosure Act (HMDA)
CUNA cites that it is hard to say HMDA is tailored to minimize the impact on small entities given that prior to the rule credit unions were not required to report HMDA data on HELOCs. CUNA’s recent survey of its members showed that nearly one in four credit unions (23%) that currently offer HELOCs plan to either curtail their offerings or stop offering them completely in response to the new HMDA rules. And CUNA says it believes this is a conservative estimate.
Although the CFPB regularly cites the exemption to entities that provide fewer than 100 remittances annually as an example of providing relief to small entities, CUNA states that this is probably the clearest example that the CFPB is simply not listening. Instead, the letter states, “This rule has made it more expensive for members to remit payment and has drawn consumers away from using credit unions and into the arms of the abusers for which the rule was designed.”