I 

113TH CONGRESS 

2D SESSION H. R. 4042 

To require a study of appropriate capital requirements for mortgage servicing 

assets for nonsystemic banking institutions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 11, 2014 

Mr. LUETKEMEYER (for himself, Mr. PERLMUTTER, Mr. COTTON, Mr. LUCAS, 

and Mr. WOMACK) introduced the following bill; which was referred to 

the Committee on Financial Services 

A BILL 

To require a study of appropriate capital requirements for 

mortgage servicing assets for nonsystemic banking institutions, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Community Bank 

5 Mortgage Servicing Asset Capital Requirements Study Act 

6 of 2014’’. 

7 SEC. 2. DEFINITIONS. 

8 For purposes of this Act: 

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1 (1) BANKING INSTITUTION.—The term ‘‘bank2 ing institution’’ means a bank holding company, in3 sured depository institution, or savings and loan 

4 holding company. 

5 (2) BASEL III CAPITAL REQUIREMENTS.—The 

6 term ‘‘Basel III capital requirements’’ means the 

7 Global Regulatory Framework for More Resilient 

8 Banks and Banking Systems issued by the Basel 

9 Committee on Banking Supervision on December 16, 

10 2010, as revised on June 1, 2011. 

11 (3) FEDERAL BANKING AGENCIES.—The term 

12 ‘‘Federal banking agencies’’ means the Board of 

13 Governors of the Federal Reserve System, the Office 

14 of the Comptroller of the Currency, and the Federal 

15 Deposit Insurance Corporation. 

16 (4) MORTGAGE SERVICING ASSET.—The term 

17 ‘‘mortgage servicing asset’’ means those assets that 

18 result from contracts to service loans secured by real 

19 estate, where such loans are owned by third parties. 

20 (5) NONSYSTEMIC BANKING INSTITUTION.— 

21 The term ‘‘nonsystemic banking institution’’ means 

22 any banking institution other than an institution 

23 identified by the Financial Stability Board as a 

24 ‘‘global systemically important bank’’. 

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1 (6) OTHER DEFINITIONS.—The terms ‘‘bank 

2 holding company’’, ‘‘insured depository institution’’, 

3 and ‘‘savings and loan holding company’’ have the 

4 meanings given such terms, respectively, under sec5 tion 3 of the Federal Deposit Insurance Act (12 

6 U.S.C. 1813). 

7 SEC. 3. STUDY OF THE APPROPRIATE CAPITAL FOR MORT8 GAGE SERVICING ASSETS. 

9 (a) IN GENERAL.—The Federal banking agencies 

10 shall, jointly, conduct a study of the appropriate capital 

11 requirements for mortgage servicing assets for nonsys12 temic banking institutions. 

13 (b) ISSUES TO BE STUDIED.—The study required by 

14 this section shall include, with a specific focus on nonsys15 temic banking institutions— 

16 (1) the risk to insured depository institutions of 

17 holding mortgage servicing assets; 

18 (2) the history of the market for mortgage serv19 icing assets, including particularly the market for 

20 such assets in the period of the financial crisis; 

21 (3) the ability of insured depository institutions 

22 to establish a value for their mortgage servicing as23 sets through periodic sales or other means; 

24 (4) regulatory approaches to mortgage servicing 

25 assets in addition to capital requirements that could 

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1 be used to address concerns about the value of and 

2 ability to sell mortgage servicing assets; 

3 (5) the impact of imposing the Basel III capital 

4 requirements on nonsystemic banking institutions on 

5 their ability to compete in the mortgage servicing 

6 business, including the need for economies of scale 

7 to compete in that business, and on their ability to 

8 provide service to consumers to whom they have 

9 made a mortgage loan; 

10 (6) an analysis of what the mortgage servicing 

11 marketplace would look like if the Basel III capital 

12 requirements on mortgage servicing assets were fully 

13 implemented; 

14 (7) the significance of problems with mortgage 

15 servicing assets, if any, in insured depository institu16 tion failures and problem insured depository institu17 tions, including specifically identifying failed insured 

18 depository institutions where mortgage servicing as19 sets contributed to the failure; and 

20 (8) an analysis of the relevance of the Basel III 

21 capital requirements on mortgage servicing assets to 

22 the banking systems of other significant developed 

23 countries. 

24 (c) REPORT TO CONGRESS.—Not later than the end 

25 of the 1-year period beginning on the date of the enactmstockstill on DSK4VPTVN1PROD with BILLS

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1 ment of this Act, the Federal banking agencies shall issue 

2 a report to the Committee on Banking, Housing, and 

3 Urban Affairs of the Senate and the Committee on Finan4 cial Services of the House of Representatives containing— 

5 (1) the results of the study required under sub6 section (a); and 

7 (2) any analysis on the specific issue of mort8 gage servicing assets undertaken by the Federal 

9 banking agencies prior to finalizing regulations im10 plementing the Basel III capital requirements. 

11 SEC. 4. DELAY OF RULEMAKING. 

12 (a) RULES ON MORTGAGE SERVICING ASSETS.—Not13 withstanding any other provision of law, no regulation to 

14 implement the Basel III capital requirements with respect 

15 to mortgage servicing assets for nonsystemic banking in16 stitutions shall take effect before the end of the 6-month 

17 period beginning on the date the report is issued under 

18 section 3(c). 

19 (b) FINAL RULE REQUIREMENTS.—Before any final 

20 rule is issued by a Federal banking agency with respect 

21 to capital requirements on mortgage servicing assets for 

22 nonsystemic banking institutions, the Federal banking 

23 agency shall— 

24 (1) if the related proposed rule was issued be25 fore the date on which the report is issued under 

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1 section 3(c), issue a new proposed rule for public 

2 comment; and 

3 (2) consider regulatory approaches to mortgage 

4 servicing assets that could address concerns about 

5 the value of and ability to sell mortgage servicing as6 sets. 

Æ 

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