July 25, 2025 • 27 mins
The "One Big Beautiful Bill Act" (OBBA) passed through Congress along party lines, preserving the credit union tax status while making significant changes to mortgage policy and CFPB funding. Zach Pfister joins the ONpoint Podcast policy series and breaks down the political dynamics behind major policy developments affecting credit union mortgage lenders and previews upcoming legislative challenges.
In this discussion with ACUMA President Peter Benjamin, Zach and he discuss:
- Credit union tax status was preserved despite being initially considered as a potential revenue source.
- Successful advocacy efforts included bipartisan congressional opposition and thousands of credit union members visiting Capitol Hill.
- CFPB funding cut by nearly 50%, from 12% to 6.5% of the Federal Reserve's operating budget.
- FHFA Director Pulte is making significant policy announcements via social media.
- Changes to GSE conservatorship are potentially coming in the fall with a "novel approach."
Tune in now to get this and much more!
Sponsored by Loan Vision.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The views and opinions expressed in this
podcast do not necessarilyreflect the views or positions
of Acuma, its board of directors, its management staff or its
members.
The podcast discussionpresented is conversational in
nature and for generalinformation only.
Speaker 2 (00:32):
Hello and welcome to Actives on Point podcast, the
policy series where we focus onpolicy issues impacting the
credit union mortgage industry.
I'm your host, peter Benjamin.
Before we get to our episode,just a quick word from our
sponsor.
Speaker 3 (00:42):
This episode is being brought to you by Loan Vision.
Is your credit union looking toturn your accounting department
into a profit driver?
Loan Vision can help.
Our platform delivers real-timedata, loan-level insights and
automations to streamlineworkflows and improve control
over financial performance.
Transform your cost centersinto revenue generators by
(01:04):
equipping your team with thetools needed to better serve
your members.
And don't miss our monthlywebinar series, where we share
key strategies and bestpractices to help credit unions
optimize their mortgageoperations.
Register today atwwwloanvisioncom under our
upcoming event speech.
Speaker 2 (01:24):
Joining us today as our resident expert is Zach
Pfister, policy director withBrownstein.
Zach, my friend, how are youdoing today?
Speaker 4 (01:31):
Doing great Peter.
Speaker 2 (01:34):
Awesome, awesome, just leaving it there, just
doing great.
All the living, living thedream, all the.
I want to say other, anotherword, but all the stuff
happening in DC just has youjust living the dream of fun,
exciting times.
(01:54):
Man, tell me what is going onin DC that our credit union
members need to know about,please, our credit union members
need to know about, please.
Speaker 4 (02:07):
Well, it's been a wild summer.
Congress is fresh off ofpassing the one big beautiful
bill act, the OBBA, or, as somemight call it, the OB3.
Speaker 2 (02:28):
I've heard some refer to it as O3B, but let's just
call it the reconciliation bill.
Speaker 4 (02:31):
By the way, I'm excited to be able to write off
my private jet.
Well, you're welcome.
Congress was hard at work onthat.
So, look, there was a lot ofpolitical capital that went into
pushing that bill across thefinish line.
It is essentially the bulk of,and it's the same party that's
(02:53):
controlling the and proceduralrequirements that traditionally
adhere to other legislation.
So instead of needing 60 votesto pass legislation in the
(03:45):
Senate, the Senate simply needsa simple majority, and
Republicans currently control 53seats in the Senate and
therefore they had some wiggleroom.
So Republicans had a cushion,have a cushion in the Senate 53
seats.
Ultimately they could losethree seats, with the vice
(04:06):
president serving as atiebreaker.
The bill passed in the wee hoursof the night, followed by House
passage just before 4th of July.
So the president got his July4th bill signing and all the
trappings that came with that,and now you know I would say
that there's been some.
(04:27):
It's served as somewhat of apressure relief valve here.
There was a lot of focus and alot of time spent on that bill
and now Congress is kind ofshifting to more traditional
items on the agenda that theystill need to deal with but they
have kind of put on hold forthe last seven months and so, as
we're looking into these lastcouple of weeks going into the
(04:50):
congressional recess, the Augustrecess, there's been a pivot to
appropriations bills.
The only problem is that theappropriations process has been
a bit discombobulated and on icefor the last several months
because of the reconciliationbill, so everything is a little
bit farther behind as comparedto where it would typically be
(05:12):
this time of year.
We will probably be lucky to seeCongress or the House pass one
or two appropriations bills nextweek at best.
This is basically going to putthem into September and the
September 30th governmentfunding deadline.
With very little to show for it.
(05:33):
We are very likely to come intoSeptember and veer straight
towards that deadline with noprogress made, no bipartisan
cooperation, and it's going tocreate another cliff.
It's likely going to result inanother CR that carries into
(05:55):
December, at which point there'sa growing consensus that that
probably means one year.
Continuing resolution probablymeans one year continuing
resolution, straight fundingthrough the election, because we
are also, when we come backfrom, uh, august recess, we will
also be in in unofficialcampaign season for the midterms
(06:16):
, even though they are still uh,16 months away so I there was a
lot you know in the OBAA,whatever you want to call it.
Speaker 2 (06:30):
You know some controversial, you know some
questionable, depending on whatside of the aisle you're on or
where your tax bracket is, whereyour tax bracket is.
But you know for us, as youknow credit union mortgage
lenders, you know some thingsthat are favorable right, like
(06:52):
our tax status is preserved aspart of this.
Now, that was kind of asurprise that that was even in
question as part of this right.
Speaker 4 (07:04):
To me.
I don't know if I was surprised.
The reality of the situation isthat whenever you're going to
start with a bill that is fourto six trillion dollars in size,
they start with a menu andeverything's on the table.
(07:26):
It's up to industry andstakeholders to get off that
menu as quick as possible andthere are a few organizations
and industries better equippedto do that through their
grassroots, through their creditunion members, than credit
unions and all the respectivetrades that were involved in
(07:46):
that success.
I think that there was aninflection point earlier in the
year when the credit union taxstatus showed up on a Ways and
Means Committee draft menu ofpotential pay-fors, and credit
unions were already longactivated on this.
(08:08):
So it happened to also coincideright around some significant
fly-ins and generally fly-inseason for credit unions.
So I would argue that on theside of the House it was
probably poorly timed for thatdraft to start circulating in
(08:29):
those meetings, even ifinformational to be taking place
while thousands of credit unionmembers were literally in town
meeting with their members ofCongress.
I don't know that the statuswas ever truly in the top tier
of threats, but that's onlybecause of how strong the credit
(08:52):
union movement has been on thisissue for years.
It is at the core in terms offoundational elements of credit
unions and what they stand for,and that message resonated
consistently across the boardwith Democrats and Republicans.
You saw bipartisan members puttheir names down in writing,
(09:12):
which is a hard thing to do,especially if you're in the
majority and you share the partywith the White House and
they're trying to move an agendaand you're putting your name
down as a red line on certainprovisions.
Now we saw that elsewhere, butwe definitely saw that on the
credit union tax status and Ithink it made a huge difference.
(09:33):
Coming out of thereconciliation bill, the Senate
version also maintained the taxstatus.
The reconciliation bill theSenate version also maintained
the tax status.
In addition, there were, toyour point, other cuts and
(09:54):
developments along the way thatalso impact credit unions,
probably from a more positivelens.
In terms of the CFPB, I don'twant to say that this is
necessarily a plus or a minus.
That's for every stakeholder todecide, but the CFPB funding
was significantly reduced.
They started at Like half right.
(10:14):
Well, yeah, it bounced around abit.
So the House bill reduced itfrom a 12% draw to a 5% draw.
This is the amount of the Fed'soperating budget that the CFPB
can use for its own funding.
So it went from 12% to 5%, so alittle over 50%.
(10:38):
The Senate bill then zeroed itout and the parliamentarian who
quickly became the most popularunelected government official in
DC over the summer ruled thatout of order and in violation of
what's known as the Byrd rule.
It's basically the rule thathelps the parliamentarian decide
(10:59):
whether or not a provisioncomplies with the budget
reconciliation process.
Now, that's a little weedy, butlong and short of it is.
The Senate Banking Committeewent too far in her opinion, so
they had to go back to thedrawing board and they came up
with a 6.5% draw, so roughly a45% or 48% cut, just over 50
(11:22):
percent, right, and that wasn'tcoincidence, right, and that was
after consultation with theparliamentarian and supportive
of the CSPB.
They're going to continue tohave their hands tied on that
funding draw for the foreseeablefuture, basically until
(12:06):
Democrats at some point in timemay find themselves with their
own trifecta, because that's theonly likely scenario in which
that funding can be restored.
What I would say lookingforward is, if you look at look
at, there's a hearing this weekin House, financial Services
heavy focus on the committee'scontinued efforts to roll back
(12:32):
CFPB rules, roll back CFPBauthorities.
Of bills that have been noticedfor this week.
They kind of give you the senseof direction where the House
wants to continue to move withthe CFPB.
I would say that this fundingcut is not the last time you're
going to see Congress attempt topare down the CFPB's reach.
Speaker 2 (12:59):
And so you know kind of sticking with.
You know this, I won't actuallysay CFPB, but let's also stick
with mortgage.
You know the one big beautifulbill also made permanent.
You know the amount thatsomeone can write off for their
you know interest write-off aswell, as made permanent or
(13:24):
brought back the mortgageinsurance write-off, right,
Right, and so kind of walk usthrough that if you could leave
(13:47):
it at.
Speaker 4 (13:48):
The goal of the tax riders in this legislation was
to ensure that as manyprovisions of TCJA 1, right, the
original Tax Cut and Jobs Actwere solidified for perpetuity,
and so they use the termpermanent, whereas the you know
there are other provisions inthis bill that you know that
have an expiration date again,and so I can't recall off the
top of my head, but there's anexpiration date for the salt
(14:10):
deduction.
There are expiration dates thatyou know create new inflection
points in the future, most ofwhich not by will be after the
president's term concludes,after his second term concludes.
But it sets up future battlesfor tax policy.
(14:32):
Now, some of the key provisions, some of the core provisions,
the individual rates, forexample, they were successful in
cementing these, but there aregoing to be inflection points in
the future.
And I should say back to myearlier point in the event that
Democrats at some point in thefuture have the House and the
(14:56):
Senate and a Democraticpresident, we should absolutely
expect them to use the samebudget authorities and take up a
partisan reconciliation billthat almost certainly touches on
tax policy.
Right, democrats, this is aone-party affair budget
(15:16):
reconciliation, it's neverbipartisan.
One party affair budgetreconciliation.
It's never bipartisan, so therewasn't a single Democratic vote
for this.
There wasn't a singleRepublican vote when Democrats
did reconciliation.
So we should expect that eventhings that are permanent are
only permanent so long asthere's not another party with a
(15:39):
trifecta that may want to makechanges in the future.
Speaker 2 (15:44):
You know.
So it's all very interesting.
I mean this, it's just, it'sinteresting.
I kind of just like a loss forwords, right, I mean, but OK, so
we talked about it'sinteresting.
I kind of just had to loss forwords, right, I mean, but OK, so
we talked about Oba, the onebig beautiful bill.
What else is happening in DC?
(16:08):
What?
Is happening in DC.
Speaker 4 (16:13):
Yeah, a little bit of both.
So I mentioned, you know, weare now entering into the Q3, q4
period, which it's interestingbecause we just got off of a
nonstop six month you know chaostrain in terms of you know
hours spent members in townworking on this big piece of
(16:37):
legislation.
And now we are over the hill insome respects where we are
going to see a bit of a lowheading into the traditional
August recess.
But that doesn't mean wheneverthey get back on the other side
of this in mid Q3 and at the endof Q4, they're not going to
have the same problems that theyleft whenever they left at the
(16:58):
end of July.
So government funding will bethe next big inflection point.
Government funding runs out onSeptember 30th.
We've seen this show before.
We're getting very accustomedto how this works.
In September they will havethree weeks when they get back
to cut a deal to keep thegovernment open.
(17:21):
We should expect that Democratshave no reason to come to the
table on anything.
Last time they weren't eveninvited to the table and you saw
the continued resolution in thespring result in full
Democratic opposition in theHouse, minus one or two votes,
and when it got to the Senate.
There was some criticism interms of how Senate Democrats
(17:41):
handled it, because they waffleda little bit in terms of their
position of default beingDemocrats don't shut down the
government.
I mean, that is a long heldfoundational belief that you
know.
Democrats are thepro-governance and
(18:02):
pro-government party.
Right, they will tell you that,they will pride themselves on
that and, as a result, theydon't often have the same
leverage in some of theseinstances, because if they have
to share the blame on shuttingdown the government, if they
have to share the blame onshutting down the government,
(18:23):
they don't often do it, and sothey provided the seven or eight
votes needed to get that billover the over the finish line
dose of criticism from the partybase and from House Democrats
(18:44):
for not, you know, being morefirm in terms of putting forward
some opposition Democraticargument would be that
Republicans control all ofWashington.
They can find a way to keep thegovernment open if they want to
do it in a way that results infurther cuts or further
furloughs or further workforcereductions or whatever it may be
, because the difference betweennow and previous years, when
(19:05):
the two parties come together ona spending deal, is that
there's the belief that theexecutive branch will actually
spend the money.
But what we're seeing now isthe executive branch is not
spending the money that Congresshas directed them to spend.
Instead, they're sending backrescissions packages that want
to make further cuts, or they'resimply terminating programs and
(19:28):
not rehiring the programofficers that would then
distribute those funds, orthey're making executive
decisions to close departmentseven though there are legally
you know, legally dubiousquestions around whether or not
they have the authorities to doso, and all of this is playing
out in the courts as well.
So there's a very bad taste interms of bipartisanship among
(19:53):
the Democrats, and I think thatthere's a significant dose of
pessimism among the Republicans,because they have their own
internal problems with, you know, with juggling the needs of
their moderates in order to getreelected but the desires and
aspirations of their fartherright wing, who would like to
see even more cuts than wherethey are now.
(20:14):
So September is going to bethat entire month.
We also have the NDAA out there,the National Defense
Authorization Act.
This is the one otherguaranteed vehicle for the rest
of the year and, as Peter knows,it often sometimes carries
(20:35):
other pieces of legislation.
We should expect every memberin Congress who has a backlog of
priorities that has beensitting on the shelf for the
last seven months, to be lookingat the NDAA as a potential
vehicle to carry their priority.
The problem here is that,similarly, these same factions
in Congress often decry the useof these larger bills, just to
(21:01):
end up being looking likeChristmas trees and that is an
official congressional termoften used.
Thrown out there that you don'twant these vehicles that often
show up at the end of the yearright before the holidays, to
turn into a Christmas tree andcarry all the different
ornaments that Congress justdidn't get to, and so it creates
(21:23):
new divisions within theRepublican conference and the
Democratic caucus as to how thatshould proceed.
Ultimately, it'll boil down tohow much Congress wants to do
some horse trading or whetherthey want to keep it clean.
But seeing as it is one of theonly other vehicles out there,
we should expect that allmembers set their sights on
(21:43):
there as a possible vehicle tocarry their bills.
Trigger leads last year Peterwas the one I was referencing,
and it very well could find itsway back.
If these two versions aren'trectified that passed the House
and Senate before, then theycould look to rectify it.
Just right alongside the NDAA.
Speaker 2 (22:06):
All right.
So thank you for welcoming usthrough that.
Last question, Last topic.
You know we always talk aboutCFPB, but I think the big one
that we have to talk about rightnow is everything happening
over at FHFA.
So what is the latest andgreatest happening over at FHFA?
Speaker 4 (22:25):
So for anyone who follows or who has historically
followed FHFA news alerts, youknow that in the current
administration the news alertsare often delivered via tweet on
X, and Director Pulte hascertainly been active on social
(22:47):
media.
It is clearly his preferredformat and medium of
communication.
Lately he's been on a bit of abent calling for the resignation
of the Federal Reserve Chairman, jerome Powell.
He normally makes at least onecomment a day on that effect.
He's obviously trying to tie inPowell's tenure with kind of a
(23:13):
static baseline on homeownershipand on the general mortgage
market.
Clearly it's no secret.
It's not a trade secret.
Obviously the president wantsJerome Powell to lower rates.
He says it quite often.
Director Pulte also wantsPowell to lower rates.
We all obviously know thatPowell himself cannot singularly
(23:37):
lower rates, but there are manyfactors that go into account
there.
So that's one thing.
I think we're all accustomed towhere the executive branch is
right now in terms of theirdesire for rates to come down.
But Pulte has also made someother recent announcements, some
quite interesting.
(23:57):
Some quite interesting.
He announced last month thatverifiable cryptocurrency
holdings can now be counted aseligible borrow assets.
He just the other day heannounced the the allowance of
the Vantage score 4.0 as anoption in in the vein of a one
(24:20):
or the other lender choice,whereas the past administration
kind of they structured it in adifferent way.
That would be kind of a newrequirement.
This is kind of this will givethe option of either going with
the traditional three creditreports or your Vantage score.
So that was an interestingdevelopment.
(24:52):
And then he also made a.
He also made an announcementrecently, one that has been
actually garnered some supportfrom Democrats over the years
too allowing rental history onmortgage applications to help
determine your credit worthinessfor a mortgage application.
He also then was seemingly alittle upset about the lack of
(25:12):
news coverage on that, and Itend to agree I was a little
surprised that they didn't getmore attention in the Capitol
Hill news rags and in thehousing alerts that we all get.
But he continues to amplifythat on Twitter, which he has a,
or on X, which he has a prettysizable following as well.
But lastly, I would sayconservatorship really still on
(25:37):
the minds of Pulte, clearlystill on the minds of Pulte.
(25:58):
I believe he had a meeting withSecretary of the Senate last
week about it.
Not a lot of details stillthere about what they're looking
to do, but it is clearlysomething that they plan to make
announcements on in the comingmonths.
There's been a heavy dose offocus on it and we could see
some announcements that might bea little, you know, considered
a little outside the box as towhere they were on
conservatorship lastadministration during the last
Trump administration.
Really get that far, but someof the more recent comments
(26:21):
suggest that they are they maybe taking more of a novel
approach on this, so time willtell, but we do expect comments
on that in the fall, all right?
Speaker 2 (26:34):
Well, as always, I mean, there's never a shortage
of things for us to talk about,and I'm sure we could keep
talking about several of thesethings and dive in a lot more,
but you know we're at time.
So, zach, thank you very muchfor taking time out of your busy
schedule to sit down with usand have this quick little
(26:55):
conversation.
Always enjoy learning as muchas I possibly can from you, but
gotta let you go.
So, zach, thank you very much.
Speaker 4 (27:05):
All right, thanks Peter, always a pleasure.
Speaker 2 (27:07):
And to quickly close out, thank you again to Loan
Vision for sponsoring today'sepisode and to all of you.
We know your time is valuable.
Thank you for tuning into thelatest episode of Action Zone
Point Podcast.
We hope you enjoyed it.
Until next time.
Be well, my friends.
Speaker 1 (27:22):
Thanks for listening.
We'll see you next time at theAcuma On Point podcast.
If not already, be sure tosubscribe and give us a
five-star rating For more greatepisodes and information.
Be sure to visit us online atacumaorg and to get the latest
updates.
Head over to our LinkedIn page.
The views and opinions expressed in this
podcast do not necessarilyreflect the views or positions
of Acuma, its board of directors, its management staff or its
members.
The podcast discussionpresented is conversational in
nature and for generalinformation only.
Speaker 2 (00:32):
Hello and welcome to Actives on Point podcast, the
policy series where we focus onpolicy issues impacting the
credit union mortgage industry.
I'm your host, peter Benjamin.
Before we get to our episode,just a quick word from our
sponsor.
Speaker 3 (00:42):
This episode is being brought to you by Loan Vision.
Is your credit union looking toturn your accounting department
into a profit driver?
Loan Vision can help.
Our platform delivers real-timedata, loan-level insights and
automations to streamlineworkflows and improve control
over financial performance.
Transform your cost centersinto revenue generators by
(01:04):
equipping your team with thetools needed to better serve
your members.
And don't miss our monthlywebinar series, where we share
key strategies and bestpractices to help credit unions
optimize their mortgageoperations.
Register today atwwwloanvisioncom under our
upcoming event speech.
Speaker 2 (01:24):
Joining us today as our resident expert is Zach
Pfister, policy director withBrownstein.
Zach, my friend, how are youdoing today?
Speaker 4 (01:31):
Doing great Peter.
Speaker 2 (01:34):
Awesome, awesome, just leaving it there, just
doing great.
All the living, living thedream, all the.
I want to say other, anotherword, but all the stuff
happening in DC just has youjust living the dream of fun,
exciting times.
(01:54):
Man, tell me what is going onin DC that our credit union
members need to know about,please, our credit union members
need to know about, please.
Speaker 4 (02:07):
Well, it's been a wild summer.
Congress is fresh off ofpassing the one big beautiful
bill act, the OBBA, or, as somemight call it, the OB3.
Speaker 2 (02:28):
I've heard some refer to it as O3B, but let's just
call it the reconciliation bill.
Speaker 4 (02:31):
By the way, I'm excited to be able to write off
my private jet.
Well, you're welcome.
Congress was hard at work onthat.
So, look, there was a lot ofpolitical capital that went into
pushing that bill across thefinish line.
It is essentially the bulk of,and it's the same party that's
(02:53):
controlling the and proceduralrequirements that traditionally
adhere to other legislation.
So instead of needing 60 votesto pass legislation in the
(03:45):
Senate, the Senate simply needsa simple majority, and
Republicans currently control 53seats in the Senate and
therefore they had some wiggleroom.
So Republicans had a cushion,have a cushion in the Senate 53
seats.
Ultimately they could losethree seats, with the vice
(04:06):
president serving as atiebreaker.
The bill passed in the wee hoursof the night, followed by House
passage just before 4th of July.
So the president got his July4th bill signing and all the
trappings that came with that,and now you know I would say
that there's been some.
(04:27):
It's served as somewhat of apressure relief valve here.
There was a lot of focus and alot of time spent on that bill
and now Congress is kind ofshifting to more traditional
items on the agenda that theystill need to deal with but they
have kind of put on hold forthe last seven months and so, as
we're looking into these lastcouple of weeks going into the
(04:50):
congressional recess, the Augustrecess, there's been a pivot to
appropriations bills.
The only problem is that theappropriations process has been
a bit discombobulated and on icefor the last several months
because of the reconciliationbill, so everything is a little
bit farther behind as comparedto where it would typically be
(05:12):
this time of year.
We will probably be lucky to seeCongress or the House pass one
or two appropriations bills nextweek at best.
This is basically going to putthem into September and the
September 30th governmentfunding deadline.
With very little to show for it.
(05:33):
We are very likely to come intoSeptember and veer straight
towards that deadline with noprogress made, no bipartisan
cooperation, and it's going tocreate another cliff.
It's likely going to result inanother CR that carries into
(05:55):
December, at which point there'sa growing consensus that that
probably means one year.
Continuing resolution probablymeans one year continuing
resolution, straight fundingthrough the election, because we
are also, when we come backfrom, uh, august recess, we will
also be in in unofficialcampaign season for the midterms
(06:16):
, even though they are still uh,16 months away so I there was a
lot you know in the OBAA,whatever you want to call it.
Speaker 2 (06:30):
You know some controversial, you know some
questionable, depending on whatside of the aisle you're on or
where your tax bracket is, whereyour tax bracket is.
But you know for us, as youknow credit union mortgage
lenders, you know some thingsthat are favorable right, like
(06:52):
our tax status is preserved aspart of this.
Now, that was kind of asurprise that that was even in
question as part of this right.
Speaker 4 (07:04):
To me.
I don't know if I was surprised.
The reality of the situation isthat whenever you're going to
start with a bill that is fourto six trillion dollars in size,
they start with a menu andeverything's on the table.
(07:26):
It's up to industry andstakeholders to get off that
menu as quick as possible andthere are a few organizations
and industries better equippedto do that through their
grassroots, through their creditunion members, than credit
unions and all the respectivetrades that were involved in
(07:46):
that success.
I think that there was aninflection point earlier in the
year when the credit union taxstatus showed up on a Ways and
Means Committee draft menu ofpotential pay-fors, and credit
unions were already longactivated on this.
(08:08):
So it happened to also coincideright around some significant
fly-ins and generally fly-inseason for credit unions.
So I would argue that on theside of the House it was
probably poorly timed for thatdraft to start circulating in
(08:29):
those meetings, even ifinformational to be taking place
while thousands of credit unionmembers were literally in town
meeting with their members ofCongress.
I don't know that the statuswas ever truly in the top tier
of threats, but that's onlybecause of how strong the credit
(08:52):
union movement has been on thisissue for years.
It is at the core in terms offoundational elements of credit
unions and what they stand for,and that message resonated
consistently across the boardwith Democrats and Republicans.
You saw bipartisan members puttheir names down in writing,
(09:12):
which is a hard thing to do,especially if you're in the
majority and you share the partywith the White House and
they're trying to move an agendaand you're putting your name
down as a red line on certainprovisions.
Now we saw that elsewhere, butwe definitely saw that on the
credit union tax status and Ithink it made a huge difference.
(09:33):
Coming out of thereconciliation bill, the Senate
version also maintained the taxstatus.
The reconciliation bill theSenate version also maintained
the tax status.
In addition, there were, toyour point, other cuts and
(09:54):
developments along the way thatalso impact credit unions,
probably from a more positivelens.
In terms of the CFPB, I don'twant to say that this is
necessarily a plus or a minus.
That's for every stakeholder todecide, but the CFPB funding
was significantly reduced.
They started at Like half right.
(10:14):
Well, yeah, it bounced around abit.
So the House bill reduced itfrom a 12% draw to a 5% draw.
This is the amount of the Fed'soperating budget that the CFPB
can use for its own funding.
So it went from 12% to 5%, so alittle over 50%.
(10:38):
The Senate bill then zeroed itout and the parliamentarian who
quickly became the most popularunelected government official in
DC over the summer ruled thatout of order and in violation of
what's known as the Byrd rule.
It's basically the rule thathelps the parliamentarian decide
(10:59):
whether or not a provisioncomplies with the budget
reconciliation process.
Now, that's a little weedy, butlong and short of it is.
The Senate Banking Committeewent too far in her opinion, so
they had to go back to thedrawing board and they came up
with a 6.5% draw, so roughly a45% or 48% cut, just over 50
(11:22):
percent, right, and that wasn'tcoincidence, right, and that was
after consultation with theparliamentarian and supportive
of the CSPB.
They're going to continue tohave their hands tied on that
funding draw for the foreseeablefuture, basically until
(12:06):
Democrats at some point in timemay find themselves with their
own trifecta, because that's theonly likely scenario in which
that funding can be restored.
What I would say lookingforward is, if you look at look
at, there's a hearing this weekin House, financial Services
heavy focus on the committee'scontinued efforts to roll back
(12:32):
CFPB rules, roll back CFPBauthorities.
Of bills that have been noticedfor this week.
They kind of give you the senseof direction where the House
wants to continue to move withthe CFPB.
I would say that this fundingcut is not the last time you're
going to see Congress attempt topare down the CFPB's reach.
Speaker 2 (12:59):
And so you know kind of sticking with.
You know this, I won't actuallysay CFPB, but let's also stick
with mortgage.
You know the one big beautifulbill also made permanent.
You know the amount thatsomeone can write off for their
you know interest write-off aswell, as made permanent or
(13:24):
brought back the mortgageinsurance write-off, right,
Right, and so kind of walk usthrough that if you could leave
(13:47):
it at.
Speaker 4 (13:48):
The goal of the tax riders in this legislation was
to ensure that as manyprovisions of TCJA 1, right, the
original Tax Cut and Jobs Actwere solidified for perpetuity,
and so they use the termpermanent, whereas the you know
there are other provisions inthis bill that you know that
have an expiration date again,and so I can't recall off the
top of my head, but there's anexpiration date for the salt
(14:10):
deduction.
There are expiration dates thatyou know create new inflection
points in the future, most ofwhich not by will be after the
president's term concludes,after his second term concludes.
But it sets up future battlesfor tax policy.
(14:32):
Now, some of the key provisions, some of the core provisions,
the individual rates, forexample, they were successful in
cementing these, but there aregoing to be inflection points in
the future.
And I should say back to myearlier point in the event that
Democrats at some point in thefuture have the House and the
(14:56):
Senate and a Democraticpresident, we should absolutely
expect them to use the samebudget authorities and take up a
partisan reconciliation billthat almost certainly touches on
tax policy.
Right, democrats, this is aone-party affair budget
(15:16):
reconciliation, it's neverbipartisan.
One party affair budgetreconciliation.
It's never bipartisan, so therewasn't a single Democratic vote
for this.
There wasn't a singleRepublican vote when Democrats
did reconciliation.
So we should expect that eventhings that are permanent are
only permanent so long asthere's not another party with a
(15:39):
trifecta that may want to makechanges in the future.
Speaker 2 (15:44):
You know.
So it's all very interesting.
I mean this, it's just, it'sinteresting.
I kind of just like a loss forwords, right, I mean, but OK, so
we talked about it'sinteresting.
I kind of just had to loss forwords, right, I mean, but OK, so
we talked about Oba, the onebig beautiful bill.
What else is happening in DC?
(16:08):
What?
Is happening in DC.
Speaker 4 (16:13):
Yeah, a little bit of both.
So I mentioned, you know, weare now entering into the Q3, q4
period, which it's interestingbecause we just got off of a
nonstop six month you know chaostrain in terms of you know
hours spent members in townworking on this big piece of
(16:37):
legislation.
And now we are over the hill insome respects where we are
going to see a bit of a lowheading into the traditional
August recess.
But that doesn't mean wheneverthey get back on the other side
of this in mid Q3 and at the endof Q4, they're not going to
have the same problems that theyleft whenever they left at the
(16:58):
end of July.
So government funding will bethe next big inflection point.
Government funding runs out onSeptember 30th.
We've seen this show before.
We're getting very accustomedto how this works.
In September they will havethree weeks when they get back
to cut a deal to keep thegovernment open.
(17:21):
We should expect that Democratshave no reason to come to the
table on anything.
Last time they weren't eveninvited to the table and you saw
the continued resolution in thespring result in full
Democratic opposition in theHouse, minus one or two votes,
and when it got to the Senate.
There was some criticism interms of how Senate Democrats
(17:41):
handled it, because they waffleda little bit in terms of their
position of default beingDemocrats don't shut down the
government.
I mean, that is a long heldfoundational belief that you
know.
Democrats are thepro-governance and
(18:02):
pro-government party.
Right, they will tell you that,they will pride themselves on
that and, as a result, theydon't often have the same
leverage in some of theseinstances, because if they have
to share the blame on shuttingdown the government, if they
have to share the blame onshutting down the government,
(18:23):
they don't often do it, and sothey provided the seven or eight
votes needed to get that billover the over the finish line
dose of criticism from the partybase and from House Democrats
(18:44):
for not, you know, being morefirm in terms of putting forward
some opposition Democraticargument would be that
Republicans control all ofWashington.
They can find a way to keep thegovernment open if they want to
do it in a way that results infurther cuts or further
furloughs or further workforcereductions or whatever it may be
, because the difference betweennow and previous years, when
(19:05):
the two parties come together ona spending deal, is that
there's the belief that theexecutive branch will actually
spend the money.
But what we're seeing now isthe executive branch is not
spending the money that Congresshas directed them to spend.
Instead, they're sending backrescissions packages that want
to make further cuts, or they'resimply terminating programs and
(19:28):
not rehiring the programofficers that would then
distribute those funds, orthey're making executive
decisions to close departmentseven though there are legally
you know, legally dubiousquestions around whether or not
they have the authorities to doso, and all of this is playing
out in the courts as well.
So there's a very bad taste interms of bipartisanship among
(19:53):
the Democrats, and I think thatthere's a significant dose of
pessimism among the Republicans,because they have their own
internal problems with, you know, with juggling the needs of
their moderates in order to getreelected but the desires and
aspirations of their fartherright wing, who would like to
see even more cuts than wherethey are now.
(20:14):
So September is going to bethat entire month.
We also have the NDAA out there,the National Defense
Authorization Act.
This is the one otherguaranteed vehicle for the rest
of the year and, as Peter knows,it often sometimes carries
(20:35):
other pieces of legislation.
We should expect every memberin Congress who has a backlog of
priorities that has beensitting on the shelf for the
last seven months, to be lookingat the NDAA as a potential
vehicle to carry their priority.
The problem here is that,similarly, these same factions
in Congress often decry the useof these larger bills, just to
(21:01):
end up being looking likeChristmas trees and that is an
official congressional termoften used.
Thrown out there that you don'twant these vehicles that often
show up at the end of the yearright before the holidays, to
turn into a Christmas tree andcarry all the different
ornaments that Congress justdidn't get to, and so it creates
(21:23):
new divisions within theRepublican conference and the
Democratic caucus as to how thatshould proceed.
Ultimately, it'll boil down tohow much Congress wants to do
some horse trading or whetherthey want to keep it clean.
But seeing as it is one of theonly other vehicles out there,
we should expect that allmembers set their sights on
(21:43):
there as a possible vehicle tocarry their bills.
Trigger leads last year Peterwas the one I was referencing,
and it very well could find itsway back.
If these two versions aren'trectified that passed the House
and Senate before, then theycould look to rectify it.
Just right alongside the NDAA.
Speaker 2 (22:06):
All right.
So thank you for welcoming usthrough that.
Last question, Last topic.
You know we always talk aboutCFPB, but I think the big one
that we have to talk about rightnow is everything happening
over at FHFA.
So what is the latest andgreatest happening over at FHFA?
Speaker 4 (22:25):
So for anyone who follows or who has historically
followed FHFA news alerts, youknow that in the current
administration the news alertsare often delivered via tweet on
X, and Director Pulte hascertainly been active on social
(22:47):
media.
It is clearly his preferredformat and medium of
communication.
Lately he's been on a bit of abent calling for the resignation
of the Federal Reserve Chairman, jerome Powell.
He normally makes at least onecomment a day on that effect.
He's obviously trying to tie inPowell's tenure with kind of a
(23:13):
static baseline on homeownershipand on the general mortgage
market.
Clearly it's no secret.
It's not a trade secret.
Obviously the president wantsJerome Powell to lower rates.
He says it quite often.
Director Pulte also wantsPowell to lower rates.
We all obviously know thatPowell himself cannot singularly
(23:37):
lower rates, but there are manyfactors that go into account
there.
So that's one thing.
I think we're all accustomed towhere the executive branch is
right now in terms of theirdesire for rates to come down.
But Pulte has also made someother recent announcements, some
quite interesting.
(23:57):
Some quite interesting.
He announced last month thatverifiable cryptocurrency
holdings can now be counted aseligible borrow assets.
He just the other day heannounced the the allowance of
the Vantage score 4.0 as anoption in in the vein of a one
(24:20):
or the other lender choice,whereas the past administration
kind of they structured it in adifferent way.
That would be kind of a newrequirement.
This is kind of this will givethe option of either going with
the traditional three creditreports or your Vantage score.
So that was an interestingdevelopment.
(24:52):
And then he also made a.
He also made an announcementrecently, one that has been
actually garnered some supportfrom Democrats over the years
too allowing rental history onmortgage applications to help
determine your credit worthinessfor a mortgage application.
He also then was seemingly alittle upset about the lack of
(25:12):
news coverage on that, and Itend to agree I was a little
surprised that they didn't getmore attention in the Capitol
Hill news rags and in thehousing alerts that we all get.
But he continues to amplifythat on Twitter, which he has a,
or on X, which he has a prettysizable following as well.
But lastly, I would sayconservatorship really still on
(25:37):
the minds of Pulte, clearlystill on the minds of Pulte.
(25:58):
I believe he had a meeting withSecretary of the Senate last
week about it.
Not a lot of details stillthere about what they're looking
to do, but it is clearlysomething that they plan to make
announcements on in the comingmonths.
There's been a heavy dose offocus on it and we could see
some announcements that might bea little, you know, considered
a little outside the box as towhere they were on
conservatorship lastadministration during the last
Trump administration.
Really get that far, but someof the more recent comments
(26:21):
suggest that they are they maybe taking more of a novel
approach on this, so time willtell, but we do expect comments
on that in the fall, all right?
Speaker 2 (26:34):
Well, as always, I mean, there's never a shortage
of things for us to talk about,and I'm sure we could keep
talking about several of thesethings and dive in a lot more,
but you know we're at time.
So, zach, thank you very muchfor taking time out of your busy
schedule to sit down with usand have this quick little
(26:55):
conversation.
Always enjoy learning as muchas I possibly can from you, but
gotta let you go.
So, zach, thank you very much.
Speaker 4 (27:05):
All right, thanks Peter, always a pleasure.
Speaker 2 (27:07):
And to quickly close out, thank you again to Loan
Vision for sponsoring today'sepisode and to all of you.
We know your time is valuable.
Thank you for tuning into thelatest episode of Action Zone
Point Podcast.
We hope you enjoyed it.
Until next time.
Be well, my friends.
Speaker 1 (27:22):
Thanks for listening.
We'll see you next time at theAcuma On Point podcast.
If not already, be sure tosubscribe and give us a
five-star rating For more greatepisodes and information.
Be sure to visit us online atacumaorg and to get the latest
updates.
Head over to our LinkedIn page.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.