Weekly update from the National Housing Conference
April 24, 2019
President's Message I By David M. Dworkin
Dear Friend,

The three primary regulators of the Community Reinvestment Act (CRA) met in Washington this month to formally begin a process of preparing a Notice of Proposed Rulemaking (NPR). This meeting follows an Advanced Notice of Proposed Rulemaking (ANPR) issued by the Office of the Comptroller of the Currency (OCC) on August 28, 2018. The OCC ANPR was not joined by the other two agencies, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) because of Comptroller Joseph Otting’s insistence that it be heavily weighted in the direction of a “one ratio” approach, where banks might be able to meet their CRA obligations by achieving a simple ratio of their total qualified lending divided by their total assets or deposits, or variations on that theme. NHC contributed comments to the ANPR that strongly opposed the one ratio approach, as did the vast majority of the 1,584 commentators including many NHC members such as NCRC , LISC , Enterprise Community Partners , NAAHL and JPMorgan Chase , among many others.

Both the FDIC and the Federal Reserve Board carefully reviewed the comments to the OCC ANPR and each have conducted additional meetings, including dozens of convenings around the country that were hosted by the Fed and attended by policymakers from the other two agencies. At one of the meetings that I attended, Fed Governor Lael Brainard personally attended as well. Governor Brainard’s recent comments on CRA offer important priorities to consider. NHC’s first principles on CRA modernization are simple. We believe that any new CRA regulatory regimen must:

  1. Increase investment in communities that are currently underserved;
  2. Benefit more low- and moderate-income (LMI) people, particularly people of color, who live in those communities;
  3. Ensure that CRA lending and investment does not lead to displacement of the very people it is meant to help; and
  4. Make both bank performance and government enforcement more transparent and predictable.

As the regulators begin their process of writing the first draft of a new CRA regulation, NHC will continue to be engaged with staff at all three agencies. We encourage all our members to do the same, advocating for those elements of the regulations that you believe need reform or preservation. But we also hope that you will join us in emphasizing these four key requirements of any change to CRA regulations. Over the next four weeks, we will take a closer look at each of these principles and discuss the various changes that could make them easier or harder to achieve. 

CRA is one of the most important tools that banks, communities and regulators have to increase lending and investment in underserved communities. But it has never achieved its full potential. We have an historic opportunity to invest in the people and places who need it most by making bank performance and government enforcement more transparent, predictable and ultimately more impactful. I look forward to working with you on this vitally important priority.

David M. Dworkin
NHC President and CEO
News from Washington I By Tristan Bréaux and
Quinn Mulholland
HUD announces intention to end housing aid for undocumented immigrants

Last Wednesday, the Trump administration proposed a rule that would prevent undocumented immigrants from receiving federal housing assistance. The rule would eliminate what HUD says is a regulatory loophole that allows undocumented immigrants to live in public housing. According to Politico, a HUD factsheet claims that “there may be millions of qualifying U.S. citizens and legal U.S. residents languishing on waitlists for housing assistance.” In a statement, NHC President and CEO David Dworkin said, “HUD is in the housing business, not the un-housing business. It’s a tremendous distraction of resources when HUD is struggling to maintain its current stock of public housing and already understaffed and underfunded. The way to create more affordable housing is to build more affordable housing, not create more homeless people.”
Calabria explains GSE reform plan in interview with Wall Street Journal

In an interview published yesterday by the Wall Street Journal, newly confirmed FHFA Director Mark Calabria detailed his plan to take Fannie Mae and Freddie Mac out of conservatorship. “I see my goal as setting a path to end the conservatorship,” Calabria told the Wall Street Journal, adding that Fannie and Freddie “have to be stronger, healthier companies” than they were before the crisis. Calabria also said that dealing with the qualified mortgage patch is a priority for him, although he said he wasn’t set on getting rid of it altogether.
Treasury releases new Opportunity Zones regulations

The Treasury Department released the highly anticipated second round of Opportunity Zones regulations last week. At a White House press conference on Opportunity Zones with Treasury Secretary Steve Mnuchin and HUD Secretary Ben Carson, President Trump remarked, “Our goal is to rebuild homes, schools, businesses and communities that need it the most.” The new regulations aimed to ease fears that the Opportunity Zones would prioritize real estate development instead of other kinds of economic development. Michael Novogradac, the managing partner of Novogradac & Co., told Politico, “Treasury has done an excellent job of providing clarity, the consequence of which will certainly be more investment.” The Treasury Department and HUD are both seeking public input on Opportunity Zones. The deadline to respond to the Treasury’s RFI is May 16, and to HUD’s is June 17.
Study finds discrimination against same-sex couples in the mortgage market 

Researchers at Iowa State University published a study last week revealing that mortgage lenders are more likely to deny loans from or charge higher rates for same-sex couples. Despite having similar levels of credit risk, gay couples were denied at rates 73 percent higher than straight couples and were charged 0.2 percent more in interest and fees when they were approved. As study co-author Lei Gao told NBC News, “The potentially existing lending discrimination might just reflect a corner of the iceberg.”
Freddie Mac invests $50 million in underserved areas

Freddie Mac announced last week that it has invested a total of $50 million in eight affordable housing developments in North Carolina, Tennessee, Kentucky and West Virginia. The investments were made through a new LIHTC fund with CAHEC, and mark Freddie Mac’s sixth LIHTC fund since re-entering the market last year. “From Middle Appalachia to rural North Carolina, the investments we are making will help upgrade housing stock while preserving affordability for low-income individuals and families in need of decent places to live,” Freddie Mac Vice President of Targeted Affordable Sales and Investments David Leopold said in a statement.
Member Highlight
JPMorgan Chase announces $15 million for ' Advancing Cities' Challenge winners

by Andrea Nesby

On April 18, NHC Platinum member JPMorgan Chase announced the first winning cities of its “ Advancing Cities” Challenge, an annual competition to source innovative and sustainable solutions to address the most persistent problems facing communities.

Chicago, Louisville, Miami, San Diego and Syracuse were the first cities to be announced that will be awarded $3 million each for creative solutions to drive inclusive growth through collaboration among civic, business and community leaders.

“Businesses have a role to play in bringing communities together to create greater opportunity,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase, during his announcement in Louisville according to JPMorgan’s news release. “All five of these cities have shown that they understand this type of investment and the ability to work together to solve problems is not just the right thing to do, it is also in our shared interests.”

The “ Advancing Cities” Challenge, which is part of the firm’s $500 million, five-year initiative to drive inclusive growth and create greater economic opportunity in cities, first launched in September 2018 and attracted more than 250 proposals from 143 communities across 45 states and territories.

Learn more about the winners here .
Housing starts fall to lowest levels in two years

The pace of new home construction fell last month to the lowest levels since 2017, according to the latest data from HUD and the Department of Commerce, released last week. Housing starts fell 0.3 percent to a rate of 1.139 million per year, down from 1.142 million per year in February. The region that saw the largest decline in housing starts was the Midwest, which has been devastated with largescale flooding in recent weeks. In another sign that the housing market is weakening, existing home sales fell by 4.9 percent in March, according to new data released by the National Association of REALTORS® on Monday. New home sales, however, increased 4.5 percent in March, according to the Census Bureau and HUD.
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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