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Jerome Powell, chairman of the Federal Reserve, during a House Financial Services Committee hearing on Wednesday. Powell said that significant changes are likely coming to the proposed Basel III endgame capital rule, though he would not say whether the rule will be reproposed, as some Republican lawmakers and banks would prefer.Bloomberg News The Federal Reserve's Basel III endgame proposal will likely face significant amendments before being finalized. During testimony in front of the House Financial Services Committee on Wednesday, Fed Chair Jerome Powell said he expects "broad and material" changes will be made to the proposal before the rule is finalized. He added that withdrawing the rule altogether — something called for by several Republican lawmakers — and putting forth a new proposal is a "live option" under consideration."The question we get is reproposal and I will say we haven't made that decision but if, when we reach that point, that turns out to be the appropriate thing, we won't hesitate to do it," Powell said. "It's a very plausible option. It will depend on how things lie when we reach that point."The revelation that Powell was open to significant changes to the proposal, which would amend risk-based capital standards for all banks with at least $100 billion of assets, was welcomed by large banks. Trade groups for the industry have been waging a costly and public opposition campaign against the package."We are encouraged by Chair Powell's comments on the Fed's review of the broad stakeholder comments on the capital proposal," said Kevin Fromer, CEO of the large bank industry group Financial Services Forum, in a statement. "We agree, broad and material changes are needed to the proposal to avoid significant harm to the economy, businesses of every size and American households. To achieve that, we continue to believe that a re-proposal is the best approach to giving the public a well-justified and data-based rule that is consistent with the plans of other jurisdictions."Powell said the Fed Board of Governors is in the process of reviewing the nearly 400 public comments about the proposal, which was put forth last summer. He acknowledged that the vast majority — 97% according to analysis by the law firm Latham & Watkins — of feedback was made in opposition to some or all of the proposed rule. "It's unlike anything I've seen," Powell said.During the three-hour hearing, the Fed chair noted that the board is still in the process of absorbing the commentary and is just beginning to think about potential changes to the proposal.At various points during the hearing, Powell flagged the risk capital treatment of mortgage origination, derivatives clearing — particularly for contracts impacting agriculture commodities — and the overall impact on financial markets as areas of potential changes. He noted that many of these issues were already on the Fed's radar and were included in the questions presented to the public alongside the proposal.Powell also recognized the possibility that the framework — which would apply many regulatory requirements that were previously limited to global systemically important banks to all institutions with more than $100 billion of assets — could lead to more uniformity in the business models used by banks."I think it's a real concern," Powell said. "And, again, that's something that goes into my thinking, certainly, about the proposal and where it needs to go."Powell also committed to factor in additional comments that will be collected relating to a quantitative impact study on the proposed capital framework. The study, which invited banks to submit data about how they would be impacted by the new standards, was launched in October and closed in January, the same time as the comment period on the proposal. "Vice Chair [for Supervision Michael] Barr did commit to putting the QIS out for comment," Powell said. "We will receive those comments and they will be taken into consideration as we think about the path ahead."Powell also addressed the proposal's internal divisiveness within the Fed as well as the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. It was put out for comment in July despite two FDIC directors and two Fed governors voting against the package and another two governors — including Powell — expressing strong reservations. Fed Govs. Michelle Bowman and Christopher Waller have continued to express concerns about the proposal in the months since, even calling for it to be withdrawn and reproposed."Under your tenure as chair, can you identify any other regulatory proposal which has elicited this much dissent?" Rep. Andy Barr, R-Ky., asked Powell during the hearing. "No," Powell responded. Powell declined to delve into the details of the Fed's comment review and response process, but he said he has not yet discussed the option of withdrawing the proposal with Fed Vice Chair for Supervision Michael Barr, who is tasked with setting the central banks regulatory and supervisory agendas. Yet, despite the divergent views on the initial proposal and the likelihood of amendments to it, Powell said he remains optimistic that the board can put forth a final rule with broad appeal."We're evaluating the comments, we're just coming to the place where we'll start talking about the path ahead, and I am confident we'll achieve very broad support on the board," he said.

Argyle, which helps lenders verify income and employment data, completed a $30 million funding round led by a Rockefeller Capital Management innovation fund, bringing its funding since the firm's formation to more than $100 million.The capital will be used to improve the verification experience "for the next wave of prospective customers that can benefit from our services," Chief Executive Officer and founder Shmulik Fishman said in a statement Tuesday. Argyle has never disclosed a valuation.Higher interest rates and scarce funding have pressured the financial-technology industry, with many firms' valuations slashed after peaking during the pandemic. Some have turned to job cuts, but others have found their footing. Stripe Inc.'s valuation, at about $65 billion, increased by 30% over the past year, though it's still down from a high of $95 billion in 2021.Rockefeller Asset Management's Fintech Innovation Fund was joined in the Argyle funding round by Bain Capital's venture capital division, SignalFire and Checkr Inc., past investors in the fintech. Argyle counts as customers LendingClub Corp., Upgrade Inc. and Western Alliance Bancorp's mortgage company, AmeriHome. "We believe in the company's vision and offerings, the strength of its management team, and see a significant opportunity to support its already impressive growth," Chris Randazzo, who manages the fintech innovation fund, said in an emailed statement.The funding round was completed in January.

Freddie Mac has priced its first seasoned credit risk transfer transaction of 2024, consisting of approximately $618 million guaranteed senior and non-guaranteed subordinate securities backed by a pool of reperforming loans.This program involves mortgages previously in Freddie Mac securitizations or owned by the company as whole loans that went into default. The majority have been modified, either through the Home Affordable Modification Program or another program. They have been performing for six months or longer, but they may include some forborne unpaid principal balance.Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2024-1 consists of 3,635 seasoned fixed-rate, step-rate and adjustable rate reperforming mortgages in approximately $585 million of guaranteed senior certificates and $32 million in non-guaranteed mezzanine and subordinate certificates. The transaction is expected to settle on March 14.On the closing date, the trust could include loans that are less than 30 days late on the scheduled payment.Select Portfolio Servicing and Specialized Loan Servicing are the servicers for the loans in the transaction. In the event of default, the servicers will prioritize borrower retention options and promote neighborhood stability, Freddie Mac said.In 2023, Freddie Mac only did one of these SCRT transactions, but in 2020 and 2021 the GSE made three issuances and between 2017 and 2019, it had four of these offerings in each year.To date, it has sold over $10.2 billion of non-performing loans as well as securitized approximately $78 billion of RPLs broken down into over $30 billion of fully guaranteed Participation Certificates, $35 billion of SCRT senior/sub securities, and $12 billion of Seasoned Loans Structured Transaction securitizations.In other credit risk transfer news from Freddie Mac, the GSE started a fixed-price cash tender offer to repurchase several classes of Structured Agency Credit Risk (STACR) notes, which transfer a portion of the risk of default on loans Freddie has securitized.Freddie Mac is looking to manage its costs by repurchasing STACR notes that have substantially deleveraged due to decreases in credit risk of related reference pools and increases in credit enhancements to STACR securities. As a result, these no longer provide Freddie Mac with an economically sensible means of transferring credit risk, an FAQ on the agency's website said.B of A Securities and Nomura Securities International are the lead dealer managers with Academy Securities as co-dealer manager. The offer expires at 5 p.m. eastern time on March 12.The securities covered by the tender offer are: STACR 2017-DNA2 B-1; STACR 2018-DNA3 B-1; STACR 2019-DNA4 B-1; STACR 2019-FTR2 B-1; STACR 2019-HQA1 B-1; STACR 2019-HQA3 B-1; STACR 2019-HQA4 B-1; STACR 2019-HRP1 M-3; STACR 2020-DNA3 B-1; STACR 2020-DNA5 M-2; STACR 2020-DNA6 M-2; STACR 2020-HQA3 B-1; and STACR 2020-HQA5 M-2.The tender offer consideration is based on the original principal amount of each class of notes and thus varies.

After three weeks of diminishing volumes, home loans application activity reversed course, with growth in both conventional and government markets, the Mortgage Bankers Association said.   The MBA's Market Composite Index, a measure of weekly application volumes based on surveys of the trade group members, jumped up a seasonally adjusted 9.7% for the period ending March 1. The first upturn since early February follows a 5.6% decline seven days earlier. On a year-over-year basis, activity was also 6.6% lower.Declining interest rates, although minimal, brought borrowers back unlike the previous week despite similar flattening, according to Michael Fratontoni, MBA senior vice president and chief economist.The average 30-year fixed contract rate for mortgages with conforming balances of $766,550 in most markets inched down 2 basis points to 7.02% from 7.04%. Points used to buy down the rate remained at 0.67 week over week for 80% loan-to-value ratio applications. "The latest data on inflation was not markedly better nor worse than expected, which was enough to bring mortgage rates down a bit," Fratantoni said in a press release. "Mortgage applications were up considerably relative to the prior week, which included the President's Day holiday."Both purchases and refinances saw volumes rise. The MBA's Purchase Index surged a seasonally adjusted 10.6% compared to one week earlier. Volumes, though, remained 8.6% below year-ago levels, with supply levels and affordability concerns contributing to a sluggish housing market. Of particular note was growing interest in loans backed by the Federal Housing Administration, Fratantoni added. "Purchase volume – particularly for FHA loans – was up strongly, again showing how sensitive the first-time home buyer segment is to relatively small changes in the direction of rates."But even with the growth in government-sponsored applications typically used for affordably priced properties, the average purchase-loan size still grew to $442,500, due to both elevated conventional activity and ongoing limited inventory. The mean amount was the second-highest mark this year, climbing higher by 2.9% from the prior survey's average of $430,000. With the onset of spring buying season, many in the industry are looking for signs of business growth to hold following an up-and-down start to 2024. Online real estate brokerage Redfin reported last week the biggest annual rise in new listings in almost three years and also saw demand for tours and other services it offers trending upward in February. New-listing trends represent "a real positive for the spring buying season given the lack of for-sale inventory," Fratantoni said.But greater consumer interest has not led to a similar rise in purchase activity yet. Earlier this week, brokerage Housecanary also issued its February report and determined the number of net new listings and contract volume down by 10.6% and 2.2% from 12 months earlier. Meanwhile, the MBA's Refinance Index picked up momentum with an 8.1% week-over-week gain. But the index reading was also 3.8% lower than where it stood during the same period last year. At the same time, the share of refinances relative to total activity shrank to 30.2% from 31.1% the previous week. Despite the growth in FHA and other government-backed volumes, the share of federally sponsored applications decreased on a weekly basis due to an even larger surge in conventional lending. The share of FHA-guaranteed applications declined to 12.7% from 13% the previous week, while the slice sponsored by the Department of Veterans Affairs decreased to 11.4% from 11.7%. Loan-applications backed by the U.S. Department of Agriculture accounted for the same 0.5% share. As with the conforming average, other mortgage rates remained close to the prior week's levels among MBA's lenders. The 30-year fixed contract jumbo average came in 1 basis point higher, edging up to 7.21% from 7.2%. Points decreased to 0.36 from 0.57.The average rate of 30-year fixed FHA-backed applications stayed at the prior survey's mark of 6.86%. Points, though, fell by 9 basis points to 0.9 from 0.99.The 15-year fixed contract average decreased to 6.66% from 6.7% seven days earlier. At the same time, borrowers typically used 0.67 worth of points, down from 0.68, for 80% LTV-ratio loans.The 5/1 adjustable-rate mortgage averaged 6.38%, climbing from 6.33% the previous week. Points increased to 0.67 from 0.58 for the loans, which start fixed for a 60-month period. The share of all ARM applications relative to total activity, grew to 7.7% from 7.5% in the prior survey.

National Mortgage News in partnership with the Best Companies Group is proud to announce the winners of the ranking of the Best Small Mortgage Companies to Work For. These are companies about the overall list of Best Mortgage Companies to Work For in 2024, who have between 100 and 499 employees. READ ALSO: Best Mortgage Companies to Work For 2024This ranking is the result of extensive employee surveys and reviews employer reports on benefits and policies. The employee survey covers eight topics: leadership and planning; corporate culture and communications; role satisfaction; work environment; relationship with supervisor; training, development and resources; pay and benefits; and overall engagement. Once the survey data is analyzed, the companies get a score that decides their ranking. The overall score is calculated using the employee survey (weighed at 75%) and the employer questionnaire (25%). To qualify for consideration, organizations with 25 or more employees need a minimum response rate of 40% while companies with 25 or fewer employees need 80%.READ ALSO: Best Small Mortgage Companies to Work For 2024See the best Mid-Sized Mortgage Companies to Work For in 2024 below:

Jerome Powell, chairman of the U.S. Federal Reserve, along with Federal Deposit Insurance Corp. chair Martin Gruenberg and acting Comptroller of the Currency Michael Hsu, were sent a letter from House Republicans Tuesday asking them to withdraw the proposed Basel III endgame proposal and restart the regulatory process.Bloomberg News WASHINGTON — Top banking House Republicans are urging banking regulators to withdraw their Basel III endgame proposal and to resubmit a revised rule, according to a letter obtained by American Banker. The letter, led by House Financial Services Committee Chairman Patrick McHenry, R-N.C., and Rep. Andy Barr, R-Ky., chairman of the subcommittee on financial institutions and monetary policy, is an escalation in longstanding Republican and industry pushback to the Basel rule. Increasingly, industry groups are looking to regulators to withdraw and restart the proposal, instead of just making tweaks to the final rule from the proposed version. The lawmakers' letter comes just ahead of Federal Reserve Chairman Jerome Powell's testimony in front of the full committee for his semiannual testimony on monetary policy. Powell, who's expected to hear criticisms about the proposal from Republicans — and even some narrower concerns from Democratic lawmakers — will also appear on Thursday before the Senate Banking Committee. Comment letters from the banking, energy and housing industry decried the rule — which would raise capital requirements considerably for the largest banks — on a number of grounds, including including what critics called the unsound methodology behind several assertions and regulators' failure to follow Administrative Procedure Act process requirements. Republican lawmakers have asked repeatedly about the justification for some of the proposal's toughest elements. "Those comments came from across the ideological spectrum and from a broad base of sectors," the lawmakers said in their Wednesday letter to the regulators. "This broad-based opposition makes clear that it is not just the banking industry crying wolf against heightened capital requirements." The lawmakers, in their letter to Powell, acting Comptroller of the Currency Michael Hsu and Federal Deposit Insurance Corp. Chairman Martin Gruenberg, asked that a new proposal include "rigorous quantitative analysis," which the lawmakers believe the original proposal lacks, and be introduced first as an advanced notice of proposed rulemaking, "and then proceed through the rulemaking process with transparency." Regulators, in October, extended the comment period on the proposal and asked for additional information from banks that is not shared through public filings or disclosures. "It is now unclear how the agencies will proceed or what the timeline may be for further development of the proposal," the lawmakers said in the letter. "To begin, there has been little clarity or transparency with Congress or the American people as to when or how the agencies will release the information collected from the banks or seek comment on whatever future analysis your agencies conduct using that information." The lawmakers also said that an attempt to "simply recalibrate the proposal," rather than substantially review public comments and start the rulemaking process over, would "open your agencies to criticism for rushing the process to avoid accountability under the Congressional Review Act." "Given the impact that the flawed proposal would have on the banking industry and the American economy, your agencies must provide greater clarity on what your plans are moving forward, and how you intend to take public comments into account," the lawmakers said. "We believe that the right path forward is to withdraw this flawed proposal and encourage you to do so." A Fed spokesperson said that the Fed has received the letter and plans to respond.

The recent turmoil at New York Community Bancorp is raising more questions about its auditor KPMG, which last year faced scrutiny over its audits of three now-defunct regional banks.KPMG has built up a large business auditing U.S. banks and had long audited Long Island-based New York Community. The bank's stock is down nearly 70% this year after a series of disclosures that have troubled investors. Last week, it replaced its CEO, filled leadership vacancies in its internal risk and audit departments and disclosed weaknesses in internal controls over its financial reports. The latter disclosure seemingly conflicts with an audit KPMG performed in 2022, when KPMG said the bank's internal controls were effective.The facts over KPMG's audits aren't public, making it hard to gauge whether auditors rightfully pushed back as New York Community quickly grew in 2023. But the bank's disclosures of weaknesses are the latest headache for KPMG, which audited all three of the regional banks that failed last year: Silicon Valley Bank, Signature Bank and First Republic Bank. "There's no excuse for it," said Francine McKenna, a former KPMG consultant whose The Dig newsletter focuses on accounting issues. Debates over KPMG's audits of those three banks — and now, the struggling New York Community — center around whether auditors are to blame for poor decision-making by the banks, or whether the blame lies solely on CEOs. A full answer on that question is not yet clear, but all four cases highlight the perils of rapid growth.When growing quickly, banks' risk management and financial reporting effectiveness must "keep pace with their growth in assets," said Kiridaran Kanagaretnam, a professor at York University in Canada who researches bank accounting.KPMG did not comment on the issues at New York Community. In a statement, KPMG spokesman Russ Grote said the firm has "long had a substantial and dynamic audit practice in the financial services industry." "We conduct our audits in accordance with professional standards, maintaining auditor independence. Due to client confidentiality, we have no specific comment," the KPMG spokesman said.Spokespeople at New York Community did not respond to requests for comment.The three regional banks that failed last year were all darlings of bank investors who preferred high-growth banks. New York Community long took a more old-fashioned approach, having bulked up mostly through a series of smaller mergers in the 2000s. Then came December 2022, when in an effort to diversify away from rent-controlled New York City apartment buildings, the bank bought Troy, Michigan-based Flagstar Bank. Fresh off that acquisition, regulators allowed New York Community to buy large chunks of Signature Bank once its crypto-friendly strategy led to its failure in March of last year.In a securities filing last week, New York Community said that it had "identified material weaknesses" in its internal controls for loan reviews, citing "ineffective oversight, risk assessment and monitoring activities."The company also delayed the release of its annual report, saying it's "been working diligently to finalize" it but must first complete its review of the issue. The company said it expects its annual report to state that its internal controls over financial reporting "were not effective" at the end of 2023 and lay out a "remediation plan" to fix those weaknesses.The bank's issues highlight the need for the "strictest controls and auditing" for retail-focused banks since they handle everyday depositors' money, said Atul Shah, a professor at City University of London. Shah wrote a book about auditors' shortcomings before the 2008 financial crisis and has argued for a stronger government role in auditing."Aggressive CEOs who wish to grow the numbers very fast will despise controls and favour risky assets," Shah said in an email. "This has to be checked in time and regulated."One potential explanation for New York Community's problems in 2023 is the difficulty of integrating Flagstar Bank and the chunks of Signature Bank all within one system, said Jack Castonguay, an accounting professor at Hofstra University. In 2022, New York Community's loan portfolio was entirely its own, but last year the company absorbed two other sets of loan books that "may not be structured" the same. "It's kind of like if all your devices have lightning chargers, and then you have a USB-C phone," Castonguay said.KPMG may also have found the same weaknesses as it looked at the bank's books from last year, though that information is not public yet, Castonguay noted. Last year, Castonguay wrote an op-ed arguing that while scrutiny of auditing processes is warranted, the failures of Silicon Valley, First Republic and Signature banks may have been solely due to "poor management" rather than anything within an auditors' control.Others, such as McKenna, have been far more critical and argued the failures reflect auditors failing to take a hard look at all the assumptions that make up a bank's financial statements. McKenna also criticized the "revolving door" between KPMG and bank leadership, noting the CEOs of both First Republic and Signature both held top roles at KPMG. "It seems like we've got a little cottage industry in audit partners thinking they can run banks," McKenna said. "And clearly, they're not doing a very good job."New York Community recently replaced CEO Tom Cangemi, who worked at KPMG for a few years after college but did not become a partner there — since he instead took on chief financial officer roles at banks.Cangemi, who was the architect of the bank's recent growth, did not respond to a request for comment.

Mortgage servicing rights are an asset that many organizations — troubled or not — can monetize by selling them to pad out their cash flow or manage risk.Could New York Community Bancorp go down that same path, especially in light of its recent financial woes? Keefe, Bruyette & Woods analyst Bose George thinks so.George notes that the Flagstar acquisition in 2022 brought NYCB up to $78 billion of MSRs with a carrying value on its balance sheet of $1.1 billion.While NYCB has been a long-term player in commercial and multifamily lending, its commitment to residential lending has not been as consistent.The bank previously exited the space, outsourcing the function until it acquired failed AmTrust in a regulatory purchase in 2009. But in 2017, NYCB again got out of residential mortgage lending.Once-troubled Flagstar took steps to diversify its operations and shift its focus away from residential mortgage lending, plans that were finished up under Alessandro DiNello, who was just installed as NYCB's executive chairman, president and CEO.In 2013, Flagstar made a business decision to concentrate on subservicing.In addition to the $78 billion agency and government MSR portfolio, NYCB currently subservices nearly $295 billion; it also has $9 billion of portfolio loans, according to the fourth quarter earnings release.The owned portfolio is 55% Fannie Mae, 25% Freddie Mac, along with 19% of Ginnie Mae MSRs, with the remainder for other investors, KBW said.George thinks the MSRs could fetch the carrying value if NYCB was to go that route."The carrying value of $1.1 billion equated to a valuation of 1.42% with a servicing fee of 31 basis points," George wrote. "This equates to a multiple of 4.6 times the servicing fee. These multiples are fairly similar to peers, so we think most MSRs, especially high quality GSE MSRs, should transact around carrying value."That last part is key, as government-sponsored enterprise portfolios have more potential buyers, George said.His list of parties that might be interested includes Mr. Cooper, Rithm, Annaly and Two Harbors, as well as funds that buy bulk MSR portfolios.Some banks, such as JPMorgan Chase, have also been purchasers of conforming portfolios."There are fewer buyers for Ginnie Mae MSRs and the two biggest buyers are Freedom Mortgage and Lakeview/Bayview," George said. "While Pennymac is a large Ginnie Mae servicer, that company has historically not acquired bulk MSR."The most likely purchasers would be what George termed "financial buyers" like Annaly and Two Harbors, "as opposed to operating companies. This is because if NYCB sells, they would most likely want to keep the subservicing in order to maintain the escrow deposits."Right now, NYCB has between $6 billion and $8 billion of escrow deposits. The U.S. Supreme Court recently heard a case against Bank of America regarding a conflict between New York State law (where NYCB is headquartered) and the National Banking Act over the payment of interest on mortgage escrow accounts."As long as the company keeps the subservicing on any MSR sold, they should be able to maintain the deposits, especially since most buyers are non-banks," George said. "However, if they sell the whole servicing operation, it will likely be harder to hold on to the escrow deposits."

Federal Deposit Insurance Corp. chair Martin Gruenberg joined a panel with Federal Reserve Vice Chair for Supervision Michael Barr and acting Comptroller of the Currency Michael Hsu Tuesday on the agencies' reforms to implementing regulations for the Community Reinvestment Act, which he called a "careful, balanced and strong" reform.Bloomberg News WASHINGTON — Top Federal bank regulators Tuesday reaffirmed their support for recently updated reforms to their agency's regulations implementing the Community Reinvestment Act, providing at times deeply personal cases for the need to reform the rules."There's nothing more important, more impactful for people around the country in dire need of access to credit, investment, and basic banking services than the finalization and implementation of this rule," said Federal Deposit Insurance Corp. Chairman Martin Gruenberg. "This final rule that we're now in the process of implementing is a careful, balanced and strong adaptation of CRA to the changing nature of the banking business and it is essential that we follow through on its implementation."Accompanying Gruenberg at Tuesday's regulatory roundtable at the 2024 National Interagency Community Reinvestment Conference were the heads of the other two main bank regulatory agencies shepherding the CRA rewrite: Acting Comptroller of the Currency Michael Hsu and Federal Reserve Vice Chair for Supervision Michael Barr. The agency heads articulated throughout the discussion that their agencies' staff made painstaking efforts to strengthen and modernize the CRA while ensuring various obligations under the rules are tailored to ensure banks — especially smaller firms less immediately capable of adapting to the complex regulations — are not unduly burdened. Under the rule banks under $2 billion have no additional data collection responsibilities.Barr noted that this tailoring is a crucial aspect of the final rule, since many of the updates attempt to deal with problems — like accounting for geographically distributed online lending activity — with greater relevance at larger, more complex firms. "The smallest banks, for example, can use the new rule or they can use the old rule and the old rule for some of them might be what they'd like to do," he said. "Deposit data and deposit product rules apply only to the very largest banks over $10 billion. The rule is designed to take into account the diversity of sizes and types of business models and banks in our country."Barr highlighted what he saw as a win-win for banks and communities: The clarity and consistency in the rule that should make CRA compliance more predictable for the banking industry."The metrics that are used for the retail lending test I think will provide both banks and communities with a better sense of what the playing field looks like, what other institutions are doing, and what the community needs," he said. "With respect to community development [the final rule has] an illustrative list of the activities that are eligible and then we have a process that banks and communities can come forward and say: Is this activity also eligible for CRA consideration?"Acting Comptroller Hsu said a central goal of regulators during this rewrite was to strengthen the extent to which their implementing regulations achieve the core mission of the original CRA statute with a sort of regulatory carrot and stick approach. Dinging banks for unfair lending, he says, is a crucial aspect of upholding fair lending. "If an institution is engaged in discriminatory practices, that is explicitly taken into account — we need to take that into account in the CRA assessment process," he said. "At the same time, there's opportunity [for instance with] special purpose credit programs, that's a special part of that, that is given CRA recognition."A cohort of trade groups representing the banking industry — which has long opposed some aspects of CRA reform — filed a lawsuit in February in the Northern District of Texas attempting to stop the final rule from going into effect. Barr appeared to push back on a central argument of the legal action — that regulators had overstepped their statutory authority, saying Congress delegated significant leeway to the agencies in the law. "Congress gave broad authority to the agencies to set up how that system would work — that was exercised in 1995 and again in this rulemaking process," he said.During the panel, Gruenberg provided a personal recounting of his time as a congressional aide working for his local congressman in the Bronx at a time when the area had thousands of vacant and crumbling rental properties. Just a few years after the CRA was enacted, he sat in on a meeting between a community organization and a cohort of local bankers. "The bankers walked into the basement and they sort of looked like they were walking onto the Dark Side of the Moon," he said. "They really had a look of, 'What are we doing here?'" While the meeting was somewhat tense, he argued it was ultimately groundbreaking and constructive as banks and the community organizations prior to that had very little interaction."It's important to understand that the reason those bankers were in that basement attending that meeting was because of this new law that had recently been enacted," he said. "Over the course of a generation — literally 20-plus years — those community organizations working with local financial institutions and the local and state officials building-by-building, block-by-block, neighborhood-by-neighborhood rebuilt the Bronx."

U.S. households are now paying roughly as much interest on other kinds of debt, from credit cards to student loans, as they are on their mortgages, according to the latest numbers from the Bureau of Economic Analysis.Non-mortgage interest payments climbed to an annual rate of $573.4 billion in January. That's the highest on record even after adjusting for inflation — and within a hair's breadth of the $578.3 billion in annual mortgage interest that households were shelling out as of the last quarter of 2023.The near-parity between the two series over recent months is unprecedented in data going back to the 1970s. For most of that period, interest payments on mortgages were about twice as large as other kinds. The balance has shifted because millions of Americans locked in cheap home loans at the low rates that prevailed in the post-2008 decade, or the even lower ones early in the pandemic. It meant those debts were shielded when the Federal Reserve started jacking up borrowing costs. Other types of credit — which overall have grown faster than mortgage loans since the Great Financial Crisis — were not, and the cost of servicing them has ballooned since 2022.One example illustrates the divergence: Even though the cost of new mortgages hit a multi-decade high last year, the effective rate that most homeowners actually pay remains near historic lows. Meanwhile, the typical charge on a credit card has climbed to a record above 20%, according to the Fed.The rapidly growing burden of consumer debt has gotten some investors and economists worried about a wave of defaults. US wages are now growing faster than the cost of living, but they lagged behind during most of the high-inflation period of the past few years. Especially after the government pared back pandemic benefits, many families relied on debt to maintain spending. Overall delinquencies in the US are still below pre-Covid levels, but for credit cards and auto loans — and also among younger borrowers — they're now higher, the New York Fed reported last month. What's more, the burden likely isn't spread evenly, since it's typically households with lower incomes and wealth that end up resorting to the costliest types of debt. Still, for all the difficulties that higher borrowing costs are causing for many Americans, the aggregate picture of household finances suggests that the burden should be manageable for now. The share of income that gets eaten up by interest payments has been growing fast, and it's now above what it was for most of the 2010s — but it's still well below what was normal in the decades before that.