| WASHINGTON, D.C. (April 30, 2026) — On Tuesday morning, MBA President and CEO Bob Broeksmit, CMB, testified at a lengthy regulatory oversight hearing entitled, “Prioritizing Main Street: Evaluating the Impact of Capital Proposals on Economic Growth and American Communities,” before the full House Financial Services Committee. The hearing was focused primarily on a critical Basel III “Endgame” (“B3E”) re-proposal that was released by the Fed, OCC, and FDIC on March 19, 2026. Read Broeksmit’s written and oral testimonies that focused on MBA’s bank capital-related priorities for both our commercial/multifamily and residential member segments. More in-depth summaries of the hearing can be found here and here. Why it matters: In his testimony, Broeksmit told lawmakers that bank capital rules – while highly technical – directly affect the cost and availability of housing for individual families. He noted that the current Basel III re-proposal is markedly improved compared to both the current framework and a 2023 re-proposal, while emphasizing that key provisions still need further refinement to better reflect actual risks. In particular, he highlighted how overly high capital requirements on mortgage servicing assets have driven banks out of the servicing market, reducing competition and increasing costs for borrowers – costs that ultimately show up in higher closing expenses. – Importantly, Broeksmit also pointed to inconsistencies in the Basel III framework’s treatment of warehouse lending, where banks face higher capital charges when loans are performing than when a counterparty defaults – an outcome he characterized as illogical and in need of correction. Finally, he stressed the importance of aligning capital rules for commercial and multifamily lending with actual loan performance, noting that banks play a critical role in financing housing and community development. – In short, Broeksmit outlined that thoughtful adjustments to the proposal would better align capital with risk and support more affordable housing and credit access for homeowners, renters, and commercial property borrowers. Go Deeper: As outlined in detail within the linked summaries, lawmakers from both parties asked Broeksmit to delve into how the proposed capital rules would impact competition, borrower costs, and access to credit – with specific questions regarding the treatment of MSAs, private mortgage insurance, warehouse lending, and capital requirements impacting affordability and market participation. What’s next: The B3E re-proposal was a point of emphasis with lawmakers during MBA’s recent National Advocacy conference held earlier this month. MBA continues to meet regularly with members of our association’s Basel III working group to formulate an official response to the re-proposal by the June 18, 2026, deadline. |
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