Washington, DC – National Housing Conference President and CEO David M. Dworkin issued the following statement in response to the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation proposed rule to modify the capital requirements applicable to banking organizations:
“The National Housing Conference (NHC) recognizes that completing work on Basel III endgame rules is important. We are disappointed regulators did not use an Advanced Notice of Proposed Rulemaking as this would have allowed thorough consultation from those that have to implement and are impacted by the rule. We appreciate that the 120-day comment period will allow for thoughtful responses to be made and we hope that the FDIC will be more open-minded than it appeared to be at the meeting.
We appreciate no change was made to the risk weighting of community development lending. This is an important component of the Community Reinvestment Act and any disincentives to community development would be harmful. It is troubling that the proposed rule relies so heavily on the experience of the banking industry during the mortgage crisis 15 years ago, which was comprehensively addressed in the Dodd-Frank Act.
Increasing the risk weighting on mortgages by 20% across the board over Basel III is unnecessary, unwarranted, and dramatically impacts banks’ lending to low- and moderate-income individuals, particularly in a market where home prices and mortgage rates are at historic highs. Further, the proposal ignores the significant role of mortgage insurance in mitigating losses. This proposal would expand the homeownership gap for people of color.”
NHC looks forward to working with our members to address this banking regulation to improve the proposed rule so it much better embraces standards that do no harm.”
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About the National Housing Conference: The National Housing Conference (NHC) is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest – an America where everyone is able to live in a quality, affordable home in a thriving community. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.