March 20, 2019

In This Issue:

  • Legislative Update: TTIGA Bill Has Hearing, Property Tax Reform Advances, State Budget Development Continues
  • ALTA Advocacy: Congressional Hearing Highlights
  • U.S. Consumer Bureau Under Fire in Congress Over Reduced Protection Activity
  • Latest FHA Shift to Mitigate Risks May Shut Out Some Homebuyers

Legislative Update

HB 1614—the TTIGA update bill that’s among TLTA’s 86th Session priorities —was heard in the House Insurance Committee on Tuesday March 19.
Denise Holmes, TLTA volunteer and member of TTIGA's Board provided effective testimony supporting passage of HB 1614, as did former legislator and title industry professional Rodney Anderson. The bill’s author, Rep. Tom Oliverson, was a staunch advocate for our industry when he closed his comments with a show of appreciation for all the services title agents provide beyond issuing title:
“Time is of the essence in these transactions. Many times consumers who are selling a home are waiting for funds to purchase another home. People who are buyers are expecting to have homeowners insurance premiums and that things will get paid in a prompt manner to avoid penalties. You could imagine what kind of positions these consumers are put into when something happens with the title agent and there’s nobody there to step in and make sure that these financial needs are met in a prompt manner.”
HB 1614 was left pending, as expected, and TLTA’s legislative team are working to move this priority legislation to the next step in the legislative process.
On Monday, the House Appropriations Committee voted to advance HB 1 (state budget for the 2020-21 biennium) and SB 500 (supplemental appropriations bill). The appropriations bills will be considered by all 150 members of the Texas House in the coming weeks, then the Senate will take up and consider both measures, replacing the House plan with the Senate plan and conference committees will be assigned to work out the differences. Learn more about the state budget advanced by House Appropriations Committee members.
House Public Education Committee Chairman Dan Huberty on Tuesday introduced a revised version of HB 3 – the House's public education and school finance reform legislation. HB 3 would inject $9 billion in new funding over the next two years. $2.7 billion of that new funding would be used to buy down local property tax rates for school districts. The members of the House Public Education Committee voted unanimously to advance HB 3.
Staff at TLTA are currently monitoring the development of these 77 bills and other issues that could impact our industry or industry partners.

ALTA Advocacy: Federal Updates

ALTA | March 18, 2019

House Financial Services Subcommittee Discusses Beneficial Ownership Legislation at Hearing

On March 13, the Financial Services Subcommittee on National Security began its look at updating our financial crimes and anti-money-laundering (AML) laws. The hearing featured former law enforcement and technology experts on financial crimes.
The hearing focused on three pieces of proposed legislation. The one with the most momentum is Rep. Carolyn Maloney's (D-NY) Corporate Transparency Act. This legislation would require people forming LLCs and other shell entities to file their beneficial ownership information with FinCEN at the time of creating the LCC and within 60 days of any change in beneficial ownership.
ALTA has been working with a coalition of business and good government groups called the FACT Coalition to support the legislation. Beneficial ownership is the essential piece of information FinCEN is seeking through the GTOs. It is also the only piece of information that title companies report under the GTOs that they have no business need for and no tool to validate.
This bill would provide FinCEN with access to this information from the source best in a position to provide it and give title companies a tool to reduce their compliance risk when reporting transactions under the GTOs.
The hearing also focused on a discussion draft of broader Bank Secrecy Act (BSA)/AML reform and the bipartisan Kleptocracy Asset Recovery Rewards Act that would establish a rewards program for information on assets held in U.S. financial institutions linked to foreign bribes.
We expect the Corporate Transparency Act to be considered and passed by the full committee potentially at the end of this month or in April. The Senate Banking Committee is working on a broader AML reform package that could be considered this summer.

Real Estate GTOs Discussed During House Appropriations Subcommittee Hearing on Financial Crimes

On March 12, Under Secretary of the Treasury for Terrorism and Financial Intelligence Sigal Mandelker appeared before the House Appropriations Subcommittee on Financial Services and General Government. The hearing is part of a series that the committee will hold as it develops its spending plan.
Read More »

U.S. Consumer Bureau Under Fire in Congress Over Reduced Protection Activity

Reuters | March 19, 2019
The Consumer Financial Protection Bureau’s track record of enforcement and consumer protection came under congressional scrutiny during an appearance last week by director Kathleen Kraninger before the Senate Banking Committee.

Under the leadership of Kraninger, and her predecessor Mick Mulvaney, the CFPB has significantly scaled back its enforcement actions.

U.S. Sen. Elizabeth Warren, a candidate for the 2010 Democratic presidential nomination on a platform of financial system reform, told Kraninger at the hearing that she had failed in her role. “You are supposed to be the cop on the beat, but you are only watching out for the crooks who are cheating American consumers,” she said. “If you had any decency, you’d either do your job or resign.”

Kraninger, testifying on the bureau’s semi-annual reports to Congress from 2018, said she aimed “to create a fresh outlook at the agency under my leadership."
Read More »

Latest FHA Shift to Mitigate Risks May Shut Out Some Homebuyers

HousingWire | March 18, 2019
Last week, the Federal Housing Administration took steps to mitigate risks to its single-family portfolio, announcing updates to its TOTAL Mortgage Scorecard that may flag some loans for manual underwriting.

The change applies to all loans with case numbers assigned on or after March 18th, meaning that it is likely to affect some of the loans currently sitting in an FHA lender’s pipeline.
Chatter among members of the lending community suggests a number of originators are unhappy about the changes, fearing that the end result may be that some of their borrowers will be shut out of FHA financing.

Some said the FHA did not go about implementing the changes the right way, creating confusion about how the risk is being mitigated, while others said they felt as if the rug had been pulled out from under them, and fear that borrowers who no longer qualify will be angry, according to email exchanges between lenders and mortgage brokers, shared with HousingWire.

For its part, the FHA said it is taking necessary steps to address some of the risk trends apparent in its single-family portfolio and flagged as concerning in its 2018 Report to Congress.
Read More »

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