And, If You’ll Permit Me: White House EO Seeks Faster Housing Approvals and Looser Federal Development Rules
If the above mortgage-credit EO was an invitation to regulators to revisit the financing side of housing, this companion Order is its land-use-and-construction counterpart – an equally-broad federal salvo to make it easier, faster, and cheaper to build homes. The Order says housing affordability has been squeezed by “unnecessary regulatory barriers, slow permitting processes, and onerous mandates at all levels of government,” and it directs those same prudential agencies to start reviewing the federal rules, programs, and practices that the White House believes are raising construction costs and suppressing supply.
The first major target is environmental and infrastructure-related regulation. The Order tells the Army Corps and EPA to review and revise requirements tied to stormwater, wetlands, waters of the United States, Clean Water Act section 404 permitting, Total Maximum Daily Loads, and MS4-related construction and post-construction requirements, all with an eye toward lowering construction and ownership costs, streamlining decisions, and even improving insurability.
It then widens the scope, telling Commerce, HUD, DOT, and FHFA to consider reforming programs and rules that allegedly constrain affordable single-family development — especially in suburban and exurban areas — including development-density priorities, DOT’s Reconnecting Communities Pilot Program, HUD’s Pathways to Removing Obstacles to Housing Program (PRO), and FHFA’s approach to chattel lending for manufactured housing and incentives for low-balance mortgages.
The Order also takes aim at what it essentially frames as cost-adding housing mandates. USDA, HUD, DOE, and FHFA are told to review and, where appropriate, eliminate energy-efficiency, water-use, and alternative-energy requirements affecting housing, including manufactured housing. That includes manufactured-housing energy standards, HUD- and USDA-financed new-construction efficiency standards, residential building energy codes reviewed by DOE, and FHFA-related water and energy efficiency standards for underserved-market properties. Even beyond a fundamental “reduce environmental harm” argument, critics may likely argue that stripping back energy- and water-efficiency requirements may indeed lower purchase prices at the front end, but would ultimately raise utility, maintenance, and operating costs over the life of the home.
To that end, the permitting piece seems especially ambitious. The Chairman of the Council on Environmental Quality (CEQ) is directed to issue National Environmental Policy Act (NEPA) guidance that “maximally exempts” or reduces burdens on housing construction, preservation, adaptive reuse, and supporting infrastructure, including through categorical exclusions. The Advisory Council on Historic Preservation is likewise told to develop guidance that reduces section 106 burdens under the National Historic Preservation Act for housing and related infrastructure. Meanwhile, HUD must, within 60 days, issue a set of regulatory “best practices” for states and localities, including faster permitting timelines, capped fees, more by-right single-family development, third-party inspections, fewer retroactive code changes, fewer “green” or energy-choice mandates, more openness to modular and manufactured housing, and fewer limits on development beyond urban cores such as growth boundaries and moratoria. Agencies are then told to revise their own regulations, grants, guidance, technical assistance, and related documents to advance those state and local best practices.
Finally, the Order tries to line up federal incentives with new construction. Treasury and HUD are directed to evaluate how “Opportunity Zone” incentives can be better aligned with single-family home construction, including possible linkages between grants, financing tools, and Qualified Opportunity Funds developing and selling single-family homes. They are also told to assess how those “Opportunity Zone” incentives might be coordinated with the New Markets Tax Credit in places that qualify for both.
As with the mortgage EO, the important caveat is that this Order does not itself repeal the rules it targets; much of it directs agencies to review, consider, revise, or develop guidance “consistent with applicable law.”
Written by:
Brett Goodnack, JD, CAMS
Compliance Advisor
Consider If You Will, The Following: White House Issues Broad Executive Order Targeting Mortgage Rules
Consider this Executive Order an invitation to federal regulators to start reviewing a large chunk of the post-crisis mortgage rulebook. Framed as an effort to improve access to affordable mortgage credit, particularly through community banks and other “smaller banks,” the Order argues that Dodd-Frank-era statutes, regulations, and supervisory practices have made mortgage origination and servicing too costly, pushed activity out of the banking system, and reduced credit availability for some otherwise creditworthy borrowers, including rural and low- to moderate-income households (“community banks,” are defined generally as institutions with fewer than $30 billion in assets, while “smaller banks” as those with fewer than $100 billion).
As with all of this President’s EOs, keeping in mind that this Order does not (and cannot) itself rewrite Regulation Z, Regulation X, Regulation C, TRID, HMDA, appraisal rules, or bank capital standards – but, instead, repeatedly directs agencies to “consider, as appropriate and consistent with applicable law,” proposing changes, revising guidance, or developing new policies. So, like the other Orders of its ilk, it may not change the rules, but it does provide the deregulatory roadmap for CFPB, FHFA, the banking agencies, HUD, VA, USD (and others).
Let’s start with the centerpiece of the Order, mortgage origination reform. The EO tells the CFPB to “consider” amending Regulation Z to tailor ATR and QM requirements for smaller banks, including possibly creating a broader QM safe harbor for portfolio loans, and to revisit TILA, RESPA, and TRID requirements more generally for those institutions. It also specifically tees up replacing TRID timing rules with a “materiality-based standard,” (one that “preserves consumer clarity and reduces closing delays”) exempting small-mortgage loans from QM points-and-fees caps or adjusting those caps and removing what the Order characterizes as unnecessarily burdensome ATR/QM elements. Shifting toward a “materiality-based” framework certainly seems like a logical regulatory move, but redrawing timing rules isn’t as easy as it sounds, practically speaking, and brings with it several hard-to-answer questions, such as “what actually counts as material,” “when did the borrower truly receive effective notice,” and, relatedly, “who bears the risk when proof of delivery or receipt is uncertain?”.
On Regulation X, the Order pushes the CFPB to modernize rescission through digital processes, streamline Regulation X requirements for rate-and-term refinancing, and even exempt rate-and-term refinancing (including cash-out refinancing) from rescission rights. That latter proposal is especially notable, as it signals an effort not just to simplify process, but to narrow a longstanding borrower protection in at least some refinancing contexts, while also reflecting a broader push toward digital mortgage modernization in an area where technical defects can trigger disproportionately significant consequences.
While still on mortgage lending, the Order goes after supervision and instructs the CFPB, Federal Reserve, FDIC, OCC, and NCUA to consider revising supervisory guidance so that mortgage lending is evaluated more on the effectiveness of a lender’s underwriting and ATR-related policies, and less on technical or process compliance. It also pushes a correction-first approach for good-faith technical errors, reserving enforcement for borrower harm or repeated misconduct. As you may be able to already tell, that’s a theme that shows up throughout the Order – an overall move away from paperwork defects and toward what the Administration views as “material” borrower risk.
HMDA’s up next. The CFPB is directed to consider raising the asset threshold for HMDA reporting exemptions for smaller banks, excluding inquiries from HMDA’s scope, and reducing privacy and operational burdens associated with data collection and disclosure, including the cost and complexity of software and training. It likely comes as no shock to anyone that the Order treats HMDA less as a disclosure and fair-lending infrastructure issue, and more as a reporting burden – one that should be pared back for smaller banks.
Moving to the “balance-sheet side” of things, the Order pushes for capital and liquidity realignment. The banking agencies and FHFA are directed to consider tailoring risk weights for portfolio mortgages, mortgage servicing rights, and warehouse lines of credit to the (you guessed it) “material credit risk” of those exposures. It also pushes for operational changes between the Federal Reserve and the Federal Home Loan Banks, including modernized collateral valuation and transfer systems, faster collateral boarding through standardized data and digital documents, expanded access to longer-dated FHLB advances tied to residential mortgage assets, and targeted liquidity programs for entry-level housing, owner-occupied purchase loans, and small residential builders. FHFA must also deliver, within 120 days, a report on national housing finance market efficiency and needed regulatory or legislative changes.
On “Construction and Housing Supply,” the Order tells the banking agencies and CFPB to consider revising supervisory guidance so that one- to four-family residential development and construction lending is excluded from commercial real estate concentration guidance, while also making sure supervisory expectations support responsible construction lending by community banks.
Appraisal modernization is the next area of focus, where the Order instructs agencies to consider expanding the use of alternative valuation models, desktop and hybrid appraisals, and AI valuation tools; simplifying appraiser qualification requirements; reducing appraisal requirements for low-risk transactions like low-LTV refinances and small-balance loans and setting clear timelines. HUD and VA are separately directed to consider aligning FHA and VA appraisal standards where risk is comparable, clarifying which inspection issues truly require pre-closing repairs, and expanding post-closing repair flexibility.
Keeping with the digitalization theme, the USDA, HUD, VA, and FHFA are told to consider eliminating unnecessary wet-signature requirements, standardizing acceptance of electronic signatures, e-notes, and remote online notarization, and promoting digital mortgage standards. The Order also seeks servicing changes by aligning supervisory expectations to support portfolio mortgage servicing as a core community banking function, extending cure-first treatment to good-faith servicing errors, simplifying loss mitigation requirements, and considering exemptions from complex servicing rules for smaller banks.
Finally, the Order takes a very explicit position on enforcement philosophy. The banking agencies and CFPB are instructed to consider policies discouraging civil money penalties for consumer-financial-law violations unless the conduct is willful, knowing, or reckless; giving weight to good corporate conduct and remediation of technical errors; and allowing institutions a reasonable chance to self-identify and correct problems. Relatedly, the EO calls on agencies to consider eliminating duplicative or unnecessary licensing or registration requirements for mortgage loan officers at smaller banks.
Now, importantly, whether any of that actually happens will depend on what the agencies do next. Again, every substantive provision in the Order is framed as something agencies “shall consider” – but early industry indications are that the agencies may be taking action on this sooner rather than later (see, for instance, HUD’s enthusiastic press release).
Written by:
Brett Goodnack, JD, CAMS
Compliance Advisor
[Fine-Tuning] the American Dream: Treasury and IRS Issue NPRM
Well, it’s not exactly a “chicken in every pot, and a car in every garage,” but the Treasury Department and the IRS are finally starting to translate Trump Accounts from slogan-ready statute into actual operating rules. As you might expect, however, their NPRM is only the first layer, and focuses on the front-end mechanics; those being, broadly – how an initial Trump Account gets opened, who may open it, and who controls it while the beneficiary is still a minor. To that end, the Treasury is seemingly leaving the heavier rules on contributions, investments, distributions, reporting, and IRA coordination for later guidance.
At a high level, the proposal treats a Trump Account as a “type of traditional IRA” for the “exclusive benefit” of an eligible child, with special rules during the child’s “growth period,” which lasts through December 31st of the year the beneficiary turns 17. During that period, distributions are generally barred, eligible investments have to follow a broad U.S. equity index and avoid leverage, fees are expected to remain low (specifically, “investments must avoid annual fees and expenses above 0.1%.”), and the account cannot function as a SIMPLE IRA or receive simplified employee pension (SEP) contributions. After the growth period, the account generally shifts into ordinary traditional IRA treatment (unless section 530A says otherwise).
Even if just perusing the proposed rule, you’d likely be able to tell that the election process is at the heart of this NPRM. The Treasury proposes that an initial Trump Account must be opened through the “simple and frictionless” process of filing a new Form 4547 or an IRS electronic application and that, again, the election must be made no later than December 31st of the year the child turns 17 (the IRS even issued separate guidance as to the Form 4547 Instructions, stating that this one-page form can be filed at “the time of filing [a] tax return.”
Moreover, the NPRM outlines that there are two related but distinct elections: one under section 530A to open an initial Trump Account, and a separate election under section 6434 for the one-time $1,000 pilot-program contribution. The two elections may be made at the same time, but importantly, that doesn’t necessarily make them the same. Because section 530A eligibility is broader than section 6434 eligibility, it appears that not every child eligible for a Trump Account will also qualify for the Treasury contribution.
The Treasury also proposes a priority (or “ordering”) rule for who may open the account. As in, if a pilot-program election is made at the same time, the authorized individual for that election may also open the account. But, if not, the order is legal guardian, parent, adult sibling, then grandparent (of the eligible individual). If multiple people exist in the same highest-priority category, any one of them may act. Apparently acknowledging that these kinds of family-priority rules are rarely without conflict, the Treasury is also asking for comment on harder family-structure questions, including foster children, wards of the state, emancipated minors, and whether key family terms would benefit from formal definitions.
The responsible-party rule is relatively simple (and potentially less rife for pushback). In general, the person who opens the initial Trump Account becomes the responsible party while the child lacks legal capacity, unless state law or the account agreement says otherwise. That person would generally be able to select among eligible investments, direct certain rollovers, and designate a successor responsible party.
Arguably, just as notable is what the Treasury is not proposing. Commenters urged automatic enrollment using tax-return or government data, but the Treasury said certain confidentiality-type restrictions under section 6103, along with banking, securities, and anti-money-laundering requirements, make that difficult under current law. So, at least for now, Trump Accounts appear likely to remain an election-based system, not an automatic one.
The IRS’s separate March 6 pilot-program guidance helps a bit to fill in the rules for the government’s one-time $1,000 contribution. To qualify, the child must be born in 2025, 2026, 2027, or 2028, be a U.S. citizen, have a Social Security number, and not already have had a prior pilot-program election processed. The same Form 4547 would be used for that election, and The Treasury says the pilot contribution would not count toward the annual contribution cap.
Remember – for those of you who parse through the entirety of the NPRM, it may help to go into it treating it as a “doorway rule,” in that it covers the front-end process for entry into the program (i.e., opening the account, who may act, and who initially controls it, etc.), but leaves many of the broader operational rules for later guidance.
Comments on the NPRM are due May 8, 2026, and with much of the broader compliance framework to come, this is yet another important one for public commentary.
Written by:
Brett Goodnack, JD, CAMS
Compliance Advisor
The Risk of No Reputation (or, The Reputation Paradox)
Well, it’s official – or soon to be. Following a years-worth of earlier activity in the same vein, the Board of Governors of the Federal Reserve System has issued a notice of proposed rulemaking that would actually codify the removal of “reputation risk” from its supervisory framework. The proposal would amend 12 CFR Part 262 by adding § 262.9 and would prohibit the Board from using reputation risk in examination programs or supervisory materials. It would also prohibit the Board from encouraging or compelling supervised banking organizations to deny or condition financial services based on constitutionally protected political or religious beliefs, speech, associations, or “lawful but politically disfavored [activities] perceived to present reputation risk.” Comments are due by April 27, 2026.
By way of background (that by now we’re all intimately familiar with), reputation risk has been part of FRB supervision since the mid-1990s and was defined as the potential that negative publicity could result in customer loss, litigation, or revenue declines. In June 2025, the Board announced it would eliminate reputation risk from examination programs and began removing references from supervisory materials and retraining examiners. In proposing to formalize that change, the Board states that reputation risk “is difficult to quantify and communicate,” and that related safety and soundness concerns can be addressed through other established risk categories such as credit, market, liquidity, operational, and legal risk. The proposal also references concerns regarding alleged “debanking” tied to political or religious beliefs or lawful but controversial and disfavored (or, perhaps, risky) business activities.
So, again, in effect, the rule would prohibit the Board from using reputation risk in examinations or supervisory materials and would codify the historical definition while removing it from supervisory consideration. It would further prohibit the Board from pressuring institutions to deny or condition services based on protected beliefs or lawful but politically disfavored conduct. In a bit of inescapable irony (which we’ll expound on in just a bit), the proposal emphasizes that customer decisions remain with the banking organization, acting in accordance with “risk management” and “applicable laws and regulations.”
The rule would apply to bank holding companies, savings and loan holding companies, state member banks, combined U.S. operations of foreign banking organizations, and their subsidiaries. As a further sign of the times, the NPRM signals potential future inclusion of permitted payment stablecoin issuers.
The proposal is primarily seeking comment on its definition of reputation risk, the scope of covered entities, the current “clarity” of the prohibition, potential unintended consequences, and alternative approaches.
Naturally, there’s an underlying tension – one that has been written about in the past, but that cannot be ignored, particularly given the nature of a formalized rule. Because on the one hand, the Board argues that reputation risk is too vague, too difficult to quantify, and unnecessary as a supervisory category because any legitimate safety and soundness concern can be captured under more concrete risk types – credit, liquidity, operational, legal, and the like.
But on the other hand, the NPRM goes out of its way to codify a prohibition preventing the Board from encouraging or compelling banks to deny services to customers engaged in lawful but politically disfavored, controversial, or just flat-out otherwise high-risk activities perceived to present reputation risk. So, if reputation risk is truly redundant, and merely a shorthand for other, measurable risks, then eliminating it arguably would only be a technical housekeeping exercise. But the fact that the Board believes it necessary to embed binding language effectively addressing the concept of “debanking” suggests that reputational dynamics remain powerful enough to shape banking relationships in ways not-so-easily reduced to a spreadsheet column.
Perhaps more fundamentally, regardless of the formality, the proposal does not – and cannot – repeal public opinion. A bank’s reputation is formed in the public eye, not in the Federal Register. Perfectly lawful businesses can still present an elevated risk, depositor sensitivity, litigation exposure, regulatory compliance burden, and a broader governance strain, even if they don’t necessarily yet trigger a discrete credit or liquidity deficiency. Historically, “reputation risk” functioned as a supervisory label for that cluster of forward-looking pressures, often early warning signals of risks that later manifest in more traditional categories. Removing the term from supervisory vocabulary doesn’t in and of itself remove the underlying exposure; and there’s an argument that it simply narrows the language examiners may use to discuss it.
Arguably, that is the central irony embedded in the proposal. While the Board emphasizes that customer decisions remain with the banking organization, acting in accordance with risk management and applicable law, the codification of politically charged constraints around supervisory influence may indirectly (or not-so-indirectly) chill banks’ willingness to exercise that discretion where reputational fallout is a real (even if “difficult to quantify”) component of their risk analysis. In supposedly attempting to eliminate subjectivity from supervision, the rule very well could risk introducing a different kind of rigidity – one that assumes reputational consequences are either irrelevant or fully captured elsewhere, even as banks continue to bear the economic and social consequences of the company they keep.
Written by:
Brett Goodnack, JD, CAMS
Compliance Advisor
OCCam’s Razor (or, The Simplest Regulatory Answer): The OCC’s GENIUS Act Proposal
Sometimes, the “simplest” answer just might be supervision. The Office of the Comptroller of the Currency (OCC) this week issued a notice of proposed rulemaking to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act – the first federally established framework governing payment stablecoins, enacted last July. The proposal opens a (very important) 60-day public comment period, and lays out how payment stablecoins would be issued, backed, supervised, and, if necessary, shut down under federal oversight.
Though it has been written about in IWT at various times in the past year, a refresher never hurts: the GENIUS Act generally prohibits anyone other than a “permitted payment stablecoin issuer” from issuing a payment stablecoin in the United States and bars digital asset service providers from offering non-compliant stablecoins to U.S. users. Importantly, the OCC’s draft rule operationalizes that framework, covering reserve asset standards, mandatory redemption at par, liquidity and risk management controls, independent audits, supervisory examinations, custody requirements, and application pathways for new issuers. It also introduces what the agency describes as a “capital and operational backstop” and proposes amendments to existing capital adequacy and enforcement rules, signaling a reality that we’ve seen coming for a while now – that stablecoin oversight won’t be just some standalone experiment, but will almost assuredly be integrated into the broader prudential supervisory regime.
The agency states that it will have regulatory / enforcement authority over certain permitted payment stablecoin issuers, including subsidiaries of national banks and federal savings associations, federally qualified payment stablecoin issuers, and certain state-qualified issuers. Notably, the proposal also asserts OCC regulatory authority over foreign payment stablecoin issuers seeking U.S. access, potentially bringing offshore actors within the scope of federal supervision if they wish to operate in the U.S. market.
And though this implies that some jurisdictional risk appears to have been contemplated in this rule – conspicuously absent from the proposal are Bank Secrecy Act and sanctions requirements – though the OCC indicated these “will be addressed in a different proposed rule” in coordination with the Treasury Department. Specifically, “Proposed § 15.13 addresses the remaining requirements and standards required under section 4(a)(4)(A)(iv) of the GENIUS Act [and] also addresses interest rate risk management standards under section 4(a)(4)(A)(iii) of the GENIUS Act.” That sequencing either suggests a “layered regulatory approach,” or an effort to get this portion of the NPRM faster.
To that end – while the statute requires the new stablecoin regime to take effect no later than January 2027 – implementation could technically begin as soon as 120 days after final rules are issued. If rulemaking proceeds “efficiently,” the transition window could be meaningfully shorter than the statutory 18-month outer bound.
How quickly it proceeds, though, may come down to the well-documented stablecoin “loopholes” within the GENIUS Act. If you’ll recall – the overall concern is that as currently written, nonbanks are allowed to recreate deposit-like products without deposit-like rules – meaning local lenders will be left competing on an uneven playing field. The specific “pain points” (forgive the understatement) that advocates – led by our own TBA – are fighting to resolve are:
- Prohibiting nonbanks from paying interest on deposits or deposit-like products
- Prohibiting nonbanks from offering reward or incentive programs that function as interest substitutes
- Not extending FDIC insurance or FDIC-like protections to nonbank entities
- Applying traditional insolvency and bankruptcy rules, without granting stablecoin holders super-priority lien status
- Avoiding special regulatory carve-outs or preferential treatment for certain states or entities (e.g., repeal or revise Section 16(d))
In an attempt to quell – or possibly dismiss – concerns surrounding potential deposit displacement, OCC Chief Jonathan Gould has publicly downplayed the likelihood of sudden destabilizing outflows, opining that any material deposit flight would not occur overnight or without warning. In broader remarks accompanying the proposal, Gould framed the rulemaking as part of a larger effort to “advance American innovation through payment stablecoins,” noting that the agency “look[s] forward to comments on our proposal to implement it” and even welcoming renewed interest in bank charters as “a sign of a healthy banking system.”
He emphasized that applications would continue to be evaluated on a case-by-case basis, consistent with statutory factors and the OCC’s high supervisory standards, while also committing to work with OCC-supervised banks to clarify new ways to conduct “the very old business of banking” and embrace emerging technologies such as AI. Relatedly, some industry observers have argued that properly regulated stablecoins could prove comparatively resilient in stress events, given the requirement to maintain 100% reserves backing 1:1 redemptions, as compared to traditional fractional reserve banking models.
Comment periods for NPRMs are arguably always important – but here, the broader crypto industry at large – not just banks and traditional industry advocates – will have the chance to weigh in; meaning that supporters can double down on even more structure and clarity, while opponents (particularly those not accustomed to prudential regulation) may push back that the rule is already overly detailed or operationally heavy.
The (376 page!) NPRM can be found here: [Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency] (what a title!)
The OCC’s related announcement can be found here: [OCC Bulletin 2026-3]
Excerpts from Jonathan Gould’s testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on the OCC’s priorities and activities (in which he spoke about the GENIUS ACT, regulatory reform, and other topics) can be found here [News Release 2026-10] and the full testimony is here [Statement of Jonathan V. Gould Comptroller of the Currency]
And, for posterity’s sake – TBA’s Grassroots Action Center – where Texas bankers can learn more about their fight, and can contact their State Senators to “ask them to close the loophole and ensure that the GENIUS Act’s prohibition on interest payments by stablecoin issuers unambiguously covers digital asset exchanges, brokers, dealers, and their affiliates” – can be found here: [Grassroots Action Center]
Written by:
Brett Goodnack, JD, CAMS
Compliance Advisor