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 insti-
tutions, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Community Bank 
Mortgage Servicing Asset Capital Requirements Study Act 
of 2014’’. 
SEC. 2. DEFINITIONS. 
For purposes of this Act: 
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(1) BANKING INSTITUTION.—The term ‘‘bank-
ing institution’’ means a bank holding company, in-
sured depository institution, or savings and loan 
holding company. 
(2) BASEL III CAPITAL REQUIREMENTS.—The 
term ‘‘Basel III capital requirements’’ means the 
Global Regulatory Framework for More Resilient 
Banks and Banking Systems issued by the Basel 
Committee on Banking Supervision on December 16, 
2010, as revised on June 1, 2011. 
(3) FEDERAL BANKING AGENCIES.—The term 
‘‘Federal banking agencies’’ means the Board of 
Governors of the Federal Reserve System, the Office 
of the Comptroller of the Currency, and the Federal 
Deposit Insurance Corporation. 
(4) MORTGAGE SERVICING ASSET.—The term 
‘‘mortgage servicing asset’’ means those assets that 
result from contracts to service loans secured by real 
estate, where such loans are owned by third parties. 
(5) NONSYSTEMIC
BANKING
INSTITUTION.— 
The term ‘‘nonsystemic banking institution’’ means 
any banking institution other than an institution 
identified by the Financial Stability Board as a 
‘‘global systemically important bank’’. 
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(6) OTHER
DEFINITIONS.—The terms ‘‘bank 
holding company’’, ‘‘insured depository institution’’, 
and ‘‘savings and loan holding company’’ have the 
meanings given such terms, respectively, under sec-
tion 3 of the Federal Deposit Insurance Act (12 
U.S.C. 1813). 
SEC. 3. STUDY OF THE APPROPRIATE CAPITAL FOR MORT-
GAGE SERVICING ASSETS. 
(a) IN GENERAL.—The Federal banking agencies 
shall, jointly, conduct a study of the appropriate capital 
requirements for mortgage servicing assets for nonsys-
temic banking institutions. 
(b) ISSUES TO BE STUDIED.—The study required by 
this section shall include, with a specific focus on nonsys-
temic banking institutions— 
(1) the risk to insured depository institutions of 
holding mortgage servicing assets; 
(2) the history of the market for mortgage serv-
icing assets, including particularly the market for 
such assets in the period of the financial crisis; 
(3) the ability of insured depository institutions 
to establish a value for their mortgage servicing as-
sets through periodic sales or other means; 
(4) regulatory approaches to mortgage servicing 
assets in addition to capital requirements that could 
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be used to address concerns about the value of and 
ability to sell mortgage servicing assets; 
(5) the impact of imposing the Basel III capital 
requirements on nonsystemic banking institutions on 
their ability to compete in the mortgage servicing 
business, including the need for economies of scale 
to compete in that business, and on their ability to 
provide service to consumers to whom they have 
made a mortgage loan; 
(6) an analysis of what the mortgage servicing 
marketplace would look like if the Basel III capital 
requirements on mortgage servicing assets were fully 
implemented; 
(7) the significance of problems with mortgage 
servicing assets, if any, in insured depository institu-
tion failures and problem insured depository institu-
tions, including specifically identifying failed insured 
depository institutions where mortgage servicing as-
sets contributed to the failure; and 
(8) an analysis of the relevance of the Basel III 
capital requirements on mortgage servicing assets to 
the banking systems of other significant developed 
countries. 
(c) REPORT TO CONGRESS.—Not later than the end 
of the 1-year period beginning on the date of the enact-
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ment of this Act, the Federal banking agencies shall issue 
a report to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Finan-
cial Services of the House of Representatives containing— 
(1) the results of the study required under sub-
section (a); and 
(2) any analysis on the specific issue of mort-
gage servicing assets undertaken by the Federal 
banking agencies prior to finalizing regulations im-
plementing the Basel III capital requirements. 
SEC. 4. DELAY OF RULEMAKING. 
(a) RULES ON MORTGAGE SERVICING ASSETS.—Not-
withstanding any other provision of law, no regulation to 
implement the Basel III capital requirements with respect 
to mortgage servicing assets for nonsystemic banking in-
stitutions shall take effect before the end of the 6-month 
period beginning on the date the report is issued under 
section 3(c). 
(b) FINAL RULE REQUIREMENTS.—Before any final 
rule is issued by a Federal banking agency with respect 
to capital requirements on mortgage servicing assets for 
nonsystemic banking institutions, the Federal banking 
agency shall— 
(1) if the related proposed rule was issued be-
fore the date on which the report is issued under 
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section 3(c), issue a new proposed rule for public 
comment; and 
(2) consider regulatory approaches to mortgage 
servicing assets that could address concerns about 
the value of and ability to sell mortgage servicing as-
sets. 
Æ 
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