STATE GOVERNMENT RELATIONS
Holcomb Appoints Nieshalla to State Comptroller
Republican Elise Nieshalla, the Boone County Council president, will serve the remaining three years of State Comptroller Tera Klutz’s term. On Tuesday, Gov. Eric Holcomb announced the appointment of Nieshalla, a real estate investor. As state auditor, Nieshalla will oversee balancing Indiana’s checkbooks and payment of all state employees.
FEDERAL GOVERNMENT RELATIONS
Lawmakers Press CFPB’s Chopra on Credit Card Fee Caps, Small Biz Reporting
Consumer Financial Protection Bureau Director Rohit Chopra appeared before the House Financial Services Committee Wednesday for the first of two congressional oversight hearings this week, during which he fielded questions from lawmakers skeptical of several bureau initiatives, including proposed rulemaking to limit credit card late fees.
“The CFPB credit card late fee proposed rule attempts to help a small number of credit card customers at the expense of a vast majority of other cardholders who never pay late, which the CFPB’s data and report indicates is 74% of all Americans with credit cards will not benefit from reduced fees,” Rep. Ann Wagner, R-Mo., said. “And according to the proposed rule, they could experience, and I quote, ‘higher maintenance fees and lower rewards.’”
Chopra responded that the CFPB analysis contained “different permutations” on the effects on cardholders. He was also pressed about the bureau’s final rule on small-business lending data collection, with the House scheduled to vote on a Congressional Review Act resolution that would overturn the rule if it is also signed by the president. The Senate passed the resolution with bipartisan support. Chopra said the bureau would abide by the resolution if it is enacted into law.
Basel Committee Seeks Comment on Climate Risk Disclosure Framework
As part of its ongoing work to address climate-related financial risks to the global banking system, the Basel Committee on Banking Supervision published a consultation paper outlining a rationale and approach for disclosure of these risks under Pillar 3 of the Basel framework. Comments on the proposals are due Feb. 29.
In the consultation paper, the committee noted that it “aims to incorporate a reasonable level of flexibility into a future framework,” given the nascent stages of climate-related data gathering and reporting. Among other things, the committee is seeking feedback on potential quantitative and qualitative data disclosure requirements; bank-specific metrics for quantitative climate disclosures; the disclosure of forward-looking information through forecasts; quantitative disclosure requirements subject to jurisdictional discretion; and several tables and templates it has developed.
The committee is also seeking input on the feasibility of a Jan. 1, 2026, implementation date for the reporting requirements, as well as potential transitional arrangements.
Read the consultative document
VA Urges Mortgage Servicers to Pause Foreclosures on Veteran-Owned Homes
The Department of Veterans Affairs is calling on mortgage servicers to pause foreclosures of VA-guaranteed loans through May 31, 2024. The agency is also extending the COVID-19 Refund Modification program through May 31, which will allow veterans to obtain a zero-interest, deferred-payment loan from VA to cover missed payments and modify their existing VA-guaranteed loan to achieve affordable monthly payments for the duration of the extension.
The Veterans Assistance Partial Claim Payment program – which began in July 2021 – allowed military borrowers to skip six or 12 mortgage payments during the COVID-19 pandemic if they were experiencing financial hardship. The program ended in October 2022 despite calls from the mortgage industry to delay its expiration, forcing borrowers to pay back payments quickly or refinance at higher interest rates.
In a statement, VA said that by extending the COVID-19 Refund Modification program, it can continue assisting veterans with their loans while it launches a new home retention option, VA Servicing Purchase program. Through the new program, the agency will purchase defaulted VA loans from mortgage servicers, modify the loans and then place them in VA-owned portfolio as direct loans
Fannie Mae, Freddie Mac to Raise Loan Limit for Mortgage Acquisitions by $40,000
On Tuesday the Federal Housing Finance Agency announced that the baseline conforming loan limit values for mortgages Fannie Mae and Freddie Mac acquired in 2024 will increase by more than $40,000 from the previous year to $766,550 for one-unit properties. House prices in the U.S. increased by an average of 5.56% between the third quarters of 2022 and 2023, according to the agency’s House Price Index. Therefore, the baseline conforming loan limit in 2024 will increase by the same percentage as required by law.
Fed’s Waller, Bowman Uncertain About Further Rate Hikes
In separate speeches Tuesday, Federal Reserve Governors Christopher Waller and Michelle Bowman gave differing answers to the question of whether the Fed would need to continue raising the federal funds rate to tame inflation. However, both cautioned there remains much uncertainty in the economic outlook.
The Federal Open Market Committee left the federal fund rate’s target range unchanged at 5.25-5.5% during its previous two meetings – an extended pause following a series of rate hikes that kicked off in early 2022. The FOMC next meets in mid-December. Speaking at an event in Washington, D.C., Waller said he is “increasingly confident” that current monetary policy is well-positioned to return inflation to the Fed’s 2% target. “That said, there is still significant uncertainty about the pace of future activity, and so I cannot say for sure whether the FOMC has done enough to achieve price stability,” he said. “Hopefully, the data we receive over the next couple of months will help answer that question.”
During a speech in Salt Lake City, Bowman said she believes the FOMC will need to increase the rate in the future to bring down inflation. Still, she noted a number of uncertainties in her economic forecast, including questions about whether further supply-side improvements will bring down inflation on their own and about future labor force trends. “Monetary policy is not on a preset course, and I will continue to closely watch the incoming data as I assess the implications for the economic outlook and the appropriate path of monetary policy,” she said.