Senate to vote on TRIA reauthorization bill, Federal Reserve Membership

This week, the Senate is expected to consider a bill (S. 2244) that would reauthorize the Terrorism Risk Insurance Act (TRIA) for seven years, while making few changes to the current program.  On July 10, Senate leadership agreed to a list of four amendments that are likely to be offered to the legislation. Notably, one of the amendments, offered by Senator David Vitter (R-LA), would amend the Federal Reserve Act to require the President to appoint at least one member with “demonstrated primary experience working in or supervising community banks.”

The House version of the bill (H.R. 4871), which was favorably reported out of the House Financial Services Committee on June 20, would reauthorize the program for five years and phase in changes aimed at reducing the government’s role in the terrorism risk insurance market. While the timing of a vote in the House is less clear, it is possible that they may also consider their version of the legislation this week.

House democrats introduce new Housing Finance Reform Bill

On July 10, Representatives John Delaney (D-MD), John Carney (D-DE), and Jim Himes (D-CT) introduced H.R. 5055, the “Partnership to Strengthen Homeownership Act of 2014.” The legislation would reduce the government’s role in the housing finance industry by winding down the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.  However, the proposal would allow the insurance businesses of Fannie Mae and Freddie Mac to continue as smaller private companies. The proposal also provides Ginnie Mae with the ability to back future mortgage bonds after private investors take the first five percent of losses. Ginnie Mae would then partner with private insurance companies to cover the remaining losses. The Representatives hope that their legislation will be an alternative to the existing GSE reform proposals, early next year.


  • Tuesday, July 15: The House Financial Services Subcommittee on Oversight and Investigations will hold a hearing titled “The Departments of Justice’s ‘Operation Chokepoint.’”
  • Tuesday, July 15: The House Financial Services Subcommittee on Financial Institutions and Consumer Credit will hold a hearing titled “Examining Regulatory Relief Proposals for Community Financial Institutions, Part II.”
  • Tuesday, July 15: The Senate Banking Committee will hold a hearing titled “The Semiannual Monetary Policy Report to Congress.”
  • Wednesday, July 16: The House Financial Services Committee will hold a hearing titled “Monetary Policy and the State of the Economy.”
  • Wednesday, July 16: The Senate Banking Subcommittee on Financial Institutions and Consumer Protection will hold a hearing titled “What Makes a Bank Systemically Important.”
  • Thursday, July 17: The House Financial Services Subcommittee on Monetary Policy and Trade will hold a hearing titled “A legislative Proposal Entitled the ‘Bank Account Seizure of Terrorist Assets (BASTA) Act.’”

Regulatory ACTIVITY

FHFA Proposes New Mortgage Insurance Rules

On July 10, the Federal Housing Finance Agency (FHFA) proposed revised eligibility requirements for Fannie Mae and Freddie Mac to approve private mortgage insurers that provide mortgage insurance on loans owned or guaranteed by the GSEs. The proposed rules would require insurance companies to hold liquid assets equal to at least 5.6 percent of their portfolio, which could be adjusted higher depending on certain risk factors and their performance under certain stress tests.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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