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Washington Policy Update
Allison Karakis, Senior Director, Government Relations
Policy Environment
Republican lawmakers have successfully navigated the complexities of maintaining unity within narrow majorities in Congress to advance many of President Trump’s key priorities. This includes the passage of a comprehensive tax reform bill, referred to as the “One Big Beautiful Bill Act” and a $9 billion rescissions bill. Passage was particularly noteworthy given that some members represent swing districts that typically favor bipartisan cooperation, potentially complicating their re-election prospects.
The legislative process has not been without its challenges. In early July, a procedural vote for the tax bill set a record for the longest House vote, only for this record to be surpassed later in the month during the consideration of the GENIUS Act rule vote. On both occasions, Republican leadership managed to overcome opposition through a combination of negotiations and pressure tactics, including direct intervention from President Trump.
The next significant deadline for Congress is to fund the government beyond September 30. This process will require votes from Democrats in the Senate. Political tensions are heightened following sweeping changes in the federal government and the passage of substantial bills without bipartisan support. Adding to the complexity, Republicans have used the rescissions process to claw back funds previously appropriated through bipartisan votes, prompting Democrats to seek assurances that this will not occur again.
The House and Senate are scheduled to be in recess until after Labor Day. As members of Congress return home, they will receive direct feedback from constituents that is often different than perceptions in Washington. These conversations shape the views of lawmakers on the in-district impacts when they return to the Capitol.
Fannie and Freddie VantageScore Acceptance
FHFA Director Bill Pulte announced that Fannie and Freddie would begin accepting mortgages underwritten with VantageScore 4.0, in addition to classic FICO, immediately. The FHFA subsequently posted an FAQ page that indicates Fannie and Freddie are completing the final steps to allow delivery of loans using VantageScore 4.0.
Senate Banking Chairman Scott applauded the action saying, “Seven years ago, I led legislation – that was signed into law – to allow for the inclusion of alternative data sources like rent, utility, and telecom bill payments into credit scoring models. Under President Trump, FHFA Director Pulte is taking long-overdue action to lower costs and expand homeownership opportunities for hardworking Americans across the country.”
Proposed Rule to Rescind Final 2023 CRA Rule
The OCC, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the Agencies) issued a joint notice of proposed rulemaking (NPR) to rescind the Community Reinvestment Act (CRA) final rule issued October 24, 2023, (2023 CRA Final Rule). The NPR would replace the 2023 CRA Final Rule with regulations substantively identical to those in effect on March 29, 2024—first adopted by the Agencies in 1995 and reinstated by the OCC in 2021 (1995/2021 CRA regulation).
Comments are due by August 18.
Executive Order Titled “Ending Crime and Disorder on America’s Streets”
The Trump Administration issued an Executive Order and stated, “Endemic vagrancy, disorderly behavior, sudden confrontations, and violent attacks have made our cities unsafe. The number of individuals living on the streets in the United States on a single night during the last year of the previous administration — 274,224 — was the highest ever recorded. The overwhelming majority of these individuals are addicted to drugs, have a mental health condition, or both. Nearly two-thirds of homeless individuals report having regularly used hard drugs like methamphetamines, cocaine, or opioids in their lifetimes. An equally large share of homeless individuals reported suffering from mental health conditions. The Federal Government and the States have spent tens of billions of dollars on failed programs that address homelessness but not its root causes, leaving other citizens vulnerable to public safety threats.
Shifting homeless individuals into long-term institutional settings for humane treatment through the appropriate use of civil commitment will restore public order. Surrendering our cities and citizens to disorder and fear is neither compassionate to the homeless nor other citizens. My Administration will take a new approach focused on protecting public safety.”
Provisions includes ending support for housing-first policies. "These actions shall include, to the extent permitted by law, ending support for “housing first” policies that deprioritize accountability and fail to promote treatment, recovery, and self-sufficiency; increasing competition among grantees through broadening the applicant pool; and holding grantees to higher standards of effectiveness in reducing homelessness and increasing public safety."
Senate Banking Committee Housing Markup
Senate Banking Chairman Tim Scott (R-SC) and Ranking Member Warren (D-MA) held a historic legislative markup on a bipartisan housing package. The ROAD to Housing Act of 2025 includes legislation from members across the Senate Committee on Banking, Housing, and Urban Affairs. The package is aimed at boosting the nation’s housing supply, improving housing affordability, and increasing oversight and efficiency of federal regulators and housing programs. The executive session is the committee’s first bipartisan housing markup in over a decade. The bill was unanimously passed by the committee.
Provisions include:
- Sec. 203 – Housing Supply Frameworks Act
Directs HUD to develop best practice frameworks for zoning and land-use policies, helping communities identify and overcome barriers to housing development.
- Sec. 205 – Community Investment and Prosperity Act
Increases the Public Welfare Investment cap for the Office of the Comptroller of the Currency (OCC) and the Federal Reserve from 15% to 20%, which will enhance banks’ capacity to make investments in affordable housing.
- Sec. 209 – Innovation Fund
This section creates a competitive pot of highly-flexible funding for communities that are building more housing supply, which can be used to improve community infrastructure, build housing, and supplement water and sewer grants.
- Sec. 301 – Housing Supply Expansion Act
Updates the federal definition of manufactured housing to include modular and prefabricated units not built on a permanent chassis to encourage innovation and expand naturally occurring affordable housing.
- Sec. 402 – Small Dollar Mortgage Points and Fees
Requires the CFPB and FHFA to evaluate the impact of existing regulations that limit the points and fees that lenders can charge on qualified mortgage loans, which vary by loan limit. Based on such evaluation, the provision directs the CFPB to make any necessary regulatory changes to points and fees to help encourage additional lending for small-dollar mortgages.
- Sec. 404 – Helping More Families Save Act
Establishes a pilot program under HUD’s Family Self-Sufficiency (FSS) initiative to promote economic mobility and homeownership by enabling more families to grow their household savings.
- Sec. 502 – HOME Investment Partnerships Reauthorization and Improvement Act
This section reauthorizes the HOME Investment Partnerships Program and makes critical updates to improve program administration and facilitate the construction of more affordable housing.
- Sec. 701 – Requiring Annual Testimony and Oversight from Housing Regulators
Requires annual testimony on housing and community development issues from the heads of HUD, FHA, Ginnie Mae, U.S. Department of Agriculture, FHFA, and the VA.
One Big Beautiful Bill Act Becomes Law
The large tax bill titled “One Big Beautiful Bill Act” was passed through the budget reconciliation process, requiring only a simple majority in the Senate.
The Senate passed the bill 51-50 with Vice President Vance casting the tie-breaking vote. The House passed the bill by a vote of 218-214. President Trump signed the bill on July 4.
Rep. Fitzpatrick Opposes Bill: The congressional members from Delaware, Pennsylvania, and West Virginia voted along party lines except for U.S. Rep. Brian Fitzpatrick (R-PA). His district covers all of Bucks County and was one of just three U.S. House districts that voted for Kamala Harris and a Republican Congressman.
Provisions Include
- Sec. 72001. Modification of Limitation on the Public Debt
- Increases the statutory debt limit by $5 trillion.
- Sec. 70435. Exclusion of Interest on Loans Secured by Rural or Ag. Real Property
- Permanently allows banks insured under the Federal Deposit Insurance Act, domestic entities owned by a bank holding company, State or Federally regulated insurance companies, domestic entities owned by a State law insurance holding company, and the Federal Agricultural Mortgage Corporation (“Farmer Mac”) to exclude from gross income 25% of interest income derived from qualified real estate loans.
- Section 70105. Extension and Enhancement of Deduction for Qualified Business Income
- Makes the current-law 20% deduction for qualified business income permanent.
- Section 70421. Permanent Renewal and Enhancement of Opportunity Zones
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Section 70422. Permanent Enhancement of Low-Income Housing Tax Credit
- Increases and makes permanent the state housing credit ceiling by multiplying the dollar amount for that year by 1.125.
- Modifies the tax-exempt bond financing requirement to permit a building to receive a 4% credit without receiving a credit allocation if at least 25% (rather than 50%) of the aggregate basis of the building is financed with one or more qualified obligations.
- Section 70423. Permanent Extension of the New Markets Tax Credit
- Section 70505. Termination of Energy Efficient Home Improvement Credit
- Section 70508. Termination of New Energy Efficient Home Credit
GENIUS Act Creates Regulatory Framework for Stablecoins
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) recently became law and establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed value). This bipartisan bill passed the House 308-122 and the Senate 68-30 showing a strong interest by Congress to create parameters around quickly emerging digital assets.
Under the bill, only permitted issuers may issue a payment stablecoin for use by U.S. persons, subject to certain exceptions and safe harbors. Permitted issuers must be a subsidiary of an insured depository institution, a federal-qualified nonbank payment stablecoin issuer, or a state-qualified payment stablecoin issuer. Permitted issuers must be regulated by the appropriate federal or state regulator. Permitted issuers may choose federal or state regulation; however, state regulation is limited to those with a stablecoin issuance of $10 billion or less.
Permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets, as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves.
The bill specifies requirements for (1) reusing reserves; (2) providing safekeeping services for stablecoins; and (3) supervisory, examination. and enforcement authority over federal-qualified issuers.
Under the bill, permitted payment stablecoins are not considered securities under securities law; however, permitted issuers are subject to the Bank Secrecy Act for anti-money laundering and related purposes.
Jonathan Gould Becomes 32nd Comptroller of the Currency
Jonathan Gould became the 32nd Comptroller of the Currency (OCC) following a Senate confirmation vote of 50-45.
Gould has not issued a statement on his priorities since taking office, but during his confirmation hearing stated, “If confirmed to lead the OCC, my top priorities will be ensuring national banks support our economy, depoliticizing the banking system, improving bank supervision, and embracing innovation within the agency and the banking system. I will do everything in my power to ensure the continued relevance of our national banking system and its ability to support our national economy consistent with the President’s vision.”
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