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2026-02-16 21:27:48
[Federal Reserve's Bowman: Mortgage Servicing Rights Capital Requirements Too High, May Need Reconsideration] ⑴ Federal Reserve Vice Chair for Supervision Michelle Bowman stated that the shift of U.S. mortgage lending from banks to non-bank lenders is a "worrying trend." She attributed part of the reason to the restrictive capital requirements applicable to mortgage servicing rights at the Orlando banking conference. ⑵ Mortgage servicing rights are an asset on a bank's balance sheet, representing the net fees a bank can expect to receive for servicing a mortgage over its life. Bowman pointed out that banks holding MSRs face high regulatory risk weights, which could hinder banks from building profitable servicing businesses. ⑶ She acknowledged that these regulations stem from "reasonable concerns" but believes adjustments should be considered to address these legitimate concerns about the structure of the mortgage market while maintaining appropriate prudential safeguards.
