Central ND News

U.S. Senator Kevin Cramer, along with several of his colleagues, has raised concerns over the proposed capital requirements for mortgage loans in the Basel III Endgame proposal. In a letter addressed to Federal Reserve Chair Jerome Powell, Vice Chair Michael Barr, and Acting Comptroller of the Currency Michael Hsu, the senators expressed their apprehension regarding the potential impacts of these requirements on borrowing costs and homeownership opportunities for families.

The senators urged regulators to consider adopting mortgage capital requirements based on loan-to-value ratio, while also calling for the elimination of the 20% surcharge imposed by the proposal. They further emphasized the importance of restoring appropriate credit for private mortgage insurance and reevaluating the impact of the operational risk component on mortgage securitization markets for agency and non-agency borrowers.

Highlighting the significance of the Endgame mortgage capital requirements, the senators stated in the letter, "The Endgame mortgage capital requirements appropriately provide a more granular treatment of mortgage credit risk exposures that are empirically derived and defensible, whereas, your proposal does the opposite."

The senators expressed their strong encouragement for regulators to carefully consider their recommendations and take into account the comments received from various stakeholders. Their primary aim is to maintain a deep, liquid, and competitive market for mortgages, allowing banks to prudently assist American homeowners in achieving sustainable homeownership.

The letter, led by U.S. Senator Bill Hagerty, also received support from U.S. Senators Thom Tillis, JD Vance, Katie Boyd Britt, Michael Rounds, and Mike Crapo.

This collective effort to raise concerns over the proposed Basel III Endgame mortgage capital requirements underscores the senators' commitment to ensuring that the banking industry remains supportive of prospective homeowners. By advocating for a more balanced approach to capital requirements, they aim to protect the interests of both borrowers and lenders, ultimately facilitating the realization of the American dream of sustainable homeownership.

To learn more, click on this link: https://www.cramer.senate.gov/news/press-releases/-sen-cramer-colleagues-raise-concerns-over-the-basel-iii-endgame-proposal