Section 1 Short title
This Act may be cited as the “Community Bank Mortgage Servicing Asset Capital Requirements Study Act of 2014”.
Community Bank Mortgage Servicing Asset Capital Requirements Study Act of 2014
A BILL
To require a study of appropriate capital requirements for mortgage servicing assets for nonsystemic banking institutions, and for other purposes.
Sec. 2 Definitions
For purposes of this Act:
Banking institution— The term banking institution means a bank holding company, insured depository institution, or savings and loan holding company.
Basel III capital requirements— The term “Basel III capital requirements” means the Global Regulatory Framework for More Resilient Banks and Banking Systems issued by the Basel Committee on Banking Supervision on December 16, 2010, as revised on June 1, 2011.
Federal banking agencies— The term “Federal banking agencies” means the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.
Mortgage servicing asset— The term “mortgage servicing asset” means those assets that result from contracts to service loans secured by real estate, where such loans are owned by third parties.
Nonsystemic banking institution— The term “nonsystemic banking institution” means any banking institution other than an institution identified by the Financial Stability Board as a “global systemically important bank”.
Other definitions— The terms “bank holding company”, “insured depository institution”, and “savings and loan holding company” have the meanings given such terms, respectively, under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
Sec. 3 Study of the appropriate capital for mortgage servicing assets
In general— The Federal banking agencies shall, jointly, conduct a study of the appropriate capital requirements for mortgage servicing assets for nonsystemic banking institutions.
Issues To be studied— The study required by this section shall include, with a specific focus on nonsystemic banking institutions—
the risk to insured depository institutions of holding mortgage servicing assets;
the history of the market for mortgage servicing assets, including particularly the market for such assets in the period of the financial crisis;
the ability of insured depository institutions to establish a value for their mortgage servicing assets through periodic sales or other means;
regulatory approaches to mortgage servicing assets in addition to capital requirements that could be used to address concerns about the value of and ability to sell mortgage servicing assets;
the impact of imposing the Basel III capital requirements on nonsystemic banking institutions on their ability to compete in the mortgage servicing business, including the need for economies of scale to compete in that business, and on their ability to provide service to consumers to whom they have made a mortgage loan;
an analysis of what the mortgage servicing marketplace would look like if the Basel III capital requirements on mortgage servicing assets were fully implemented;
the significance of problems with mortgage servicing assets, if any, in insured depository institution failures and problem insured depository institutions, including specifically identifying failed insured depository institutions where mortgage servicing assets contributed to the failure; and
an analysis of the relevance of the Basel III capital requirements on mortgage servicing assets to the banking systems of other significant developed countries.
Report to Congress— Not later than the end of the 1-year period beginning on the date of the enactment of this Act, the Federal banking agencies shall issue a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives containing—
the results of the study required under subsection (a); and
any analysis on the specific issue of mortgage servicing assets undertaken by the Federal banking agencies prior to finalizing regulations implementing the Basel III capital requirements.
Sec. 4 Delay of rulemaking
Rules on mortgage servicing assets— Notwithstanding any other provision of law, no regulation to implement the Basel III capital requirements with respect to mortgage servicing assets for nonsystemic banking institutions shall take effect before the end of the 6-month period beginning on the date the report is issued under section 3(c).
Final rule requirements— Before any final rule is issued by a Federal banking agency with respect to capital requirements on mortgage servicing assets for nonsystemic banking institutions, the Federal banking agency shall—
if the related proposed rule was issued before the date on which the report is issued under section 3(c), issue a new proposed rule for public comment; and
consider regulatory approaches to mortgage servicing assets that could address concerns about the value of and ability to sell mortgage servicing assets.