Wanted to draw your attention to an op-ed from Laurie Goodman, an Institute fellow and the founder of the Housing Finance Policy Center at the Urban Institute, about the negative impacts Washington's capital requirement regulations will have on the mortgage market. In the piece, Goodman argues that:

• The proposal was developed without considering the unintended consequences it might have on the mortgage market: "In short, then, the proposal would also undermine the economics of the very lenders needed to fill the vacuum left by the retreat of the banks. Judging by the public comments of some of the regulators since the proposal’s release, these impacts on the mortgage market appear to be unintended."
• The final rules need to ensure that banks are able to service customers in the mortgage market: "Whatever the reasons, their proposal would increase risk in the mortgage market, pushing banks out of the market and making it increasingly inhospitable for the independent mortgage banks left to carry the load. The financial system would be better served if regulators were more sensitive to these dynamics in the mortgage market, adjusting the final capital rules to ensure that banks are able to continue to provide the mortgage market with the stability it needs."

Earlier this year, Goodman co-authored a study that found that the proposed changes in the Basel III Endgame rule "would disproportionately disadvantage low- and moderate-income (LMI) borrowers and communities, as well as Black and Hispanic borrowers."