House approves bill to ease mortgage servicing capital requirements

GavelThe House Financial Services Committee approved a number of bills earlier this week, including legislation from Rep. Blaine Luetkemeyer (R-Mo.) that would require regulators to conduct a study to calculate capital requirements for mortgage servicing assets.

Luetkemeyer’s bill, which was approved 44-9, would delay the implementation of Basel III capital rules on mortgage servicing assets until a complete study is conducted by the Federal Reserve, OCC and FDIC to examine the potential impact on banks’ retention of servicing rights for mortgages they originate, according to a Financial Services Committee press release.

The legislation would also prohibit the implementation of Basel III capital rules for mortgage servicing assets held by non-systemic banking institutions until three months after a report on the study, as mandated by the bill, is presented to Congress.

Regulators would have one year from the enactment of the legislation to issue the report to the Senate’s Banking, Housing and Urban Affairs Committee, as well as the House Financial Services Committee.

Additionally, the bill would require federal regulators proposing a final rule related to capital requirements on mortgage banking assets to issue a new proposed rule for public comment and consider regulatory approaches that could address concerns related to the ability to sell mortgage servicing assets.

Sponsors of the bill include Ed Perlmutter (D-Colo.), Tom Cotton (R-Ark.), Steve Womack (R-Ark.) and Frank Lucas (R-Okla.).

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