Last Tuesday, voters elected Donald J. Trump (R) as the 45th President of the United States. Voters turned out to vote against the establishment in favor of ending the status quo. This “populist right” movement does not subscribe to traditional Republican ideology, but it helped keep Republican majorities in the House and Senate. It is the first time since 2004 that Republicans will control the White House and both chambers of Congress.
The election results are expected to slow down, if not stop, a range of regulatory efforts across all sectors. The “populist right” movement believes in free enterprise, but is not blindly pro-business, which they believe is rife with crony capitalism. President-Elect Trump is expected to support a pro- growth agenda of lower taxes, less regulation, energy independence and infrastructure spending. He will also focus on “fair trade” policies and immigration policy.
It will take weeks to determine the full extent of the election’s impact. However, there are several key takeaways that help guide our expectations:
Topline Takeaway: Republicans are the beneficiaries of a “populist right” movement and control the White House, House and Senate. We expect that Congress and the Administration will work together to materially change the trend line of the last eight years of increasing regulations.
First One Hundred Days: We expect President-Elect Trump to take a relatively conciliatory approach to Congress and work to find areas of agreement. Vice President-Elect Pence will have a key role coordinating the legislative efforts of the first 100 days. President-Elect Trump is likely to sign hundreds of Executive Orders on day one, undoing many of President Obama’s controversial actions. We expect changes to Obamacare and the Consumer Financial Protection Bureau to happen within the first 100 days.
Republican Congress Will Help Produce Pro-Growth Policies: Congress will work with President- Elect Trump to move a largely pro-growth agenda. With several moderate Democratic Senators up for re-election in two years, we believe this effort could also garner some Democratic support.
Keeping the Manufactured Housing Industry’s Policy Priorities on the Radar through the Transition
Until January 20, we expect the current Administration to continue their regulatory agenda, including the regulatory process on the energy rule and installation standards. MHI still plans to respond to these efforts because it is imperative we are consistently on record with our strong concerns regarding the impact of these proposals on the cost of manufactured housing.
In preparation for the new Administration, MHI’s advocacy team is in communication with our allies in Congress that are key surrogates to the Trump transition team. In addition, preliminary meetings with members of the transition team about the importance of manufactured housing occurred last week. MHI will provide the transition team with a detailed memo of MHI’s priorities that fit within President- Elect Trump’s plans.
President-Elect Trump will have the ability to appoint a number of key regulators, including new Treasury and HUD Secretaries, a large number of Federal Reserve Board Members, FDIC Board Members, the majority of the SEC, and possibly a new CFPB Director. This will have a significant impact on financial policy. We expect President-Elect Trump to nominate loyalists for cabinet posts and those who have remained close to him throughout his campaign. Additionally, because of President-Elect Trump’s lack of government experience, we expect Vice President-Elect Mike Pence to be heavily involved and to play a major role in this administration. There are more than 4,000 political positions to be filled across the new Administration. This provides the opportunity for those with knowledge of our industry to serve. Please let MHI know if you are interested in applying for a position by emailing Dr. Lesli Gooch, MHI’s Senior Vice President of Government Affairs and Chief Lobbyist, at email@example.com.
We expect efforts to enact meaningful reforms across a number of key policy areas that impact manufactured housing, including:
CFPB Reform. The election’s outcome assures changes to the Consumer Financial Protection Bureau (CFPB). Director Richard Cordray’s term does not expire until July 2018. However, he will be under pressure by President-Elect Trump to step down so that a new director can be appointed. Conversely, Senate Democrats, led by Elizabeth Warren, have already begun urging Director Cordray to stay and remain active. With Republicans in control of Congress and the White House, there is potential for the creation of a three or five-member board to replace the lone Director.
Regardless of the outcome of the leadership debate, the CFPB is expected to be less focused on promulgating new rules but to maintain a priority on enforcement. House Republicans will likely continue a steady stream of oversight and investigative hearings into the CFPB’s efforts, specifically regarding consumer finance issues, including housing finance, indirect auto finance, mortgage servicing, overdraft fees, and legal settlements by large financial institutions.
MHI will continue to engage with congressional allies about the negative consequences to consumers seeking financing for manufactured homes resulting from the CFPB’s inaction on adjusting the HOEPA triggers and its flawed interpretation of what constitutes a loan originator. As HousingWire reported last week, the Financial CHOICE Act, which passed the House Financial Services Committee in September, is likely to be the basis for CFPB reforms made in the coming year. MHI’s advocacy team worked with the Committee to include the Preserving Access to Manufactured Housing Act (H.R. 650/S. 682) in this reform package.
Housing Finance Reform. President-Elect Trump will likely be pushed by Congressional Republicans to reform Fannie Mae and Freddie Mac and allow a stronger role for private capital in the Housing market. We also expect congressional monitoring and oversight of the statutory “duty to serve” mandate on Fannie Mae and Freddie Mac. FHFA is expected to finalize a rule to implement “duty to serve” in the near future. Congressional oversight will increase as FHFA finalizes the rule. MHI will continue to make a comprehensive case for requiring the GSEs to create a vibrant secondary market for chattel loans. MHI has actively encouraged FHFA to require Fannie Mae and Freddie Mac to substantially increase their support for manufactured housing, especially by establishing a secondary market for chattel lending. These efforts are critical because the law does not require the GSEs to purchase chattel loans, but merely gives FHFA the authority to require this if they determine it can be done consistent with safety and soundness and the “duty to serve” goals. MHI will continue to work to address concerns about chattel lending to make a substantive case that the purchase of chattel loans should be required.
Regulatory Reform. A large part of early administration efforts will be dedicated to rolling back the Obama regulatory push. Aside from a few very large and significant pieces of legislation (e.g. Obamacare, Economic Stimulus, Dodd-Frank Act) the bulk of the Obama administration’s actions have been conducted through regulation and executive order. MHI will work to ensure that regulatory initiatives undertaken by the Obama Administration are reformed to foster housing affordability, uniformity, ease of compliance, and minimize discrepancies and overlap with state and local codes. In particular, MHI will push for President-Elect Trump’s Administration to revisit current regulations that are cost prohibitive for consumers seeking to purchase a manufactured home, including the on-site rule, installation guidance and energy efficiency regulations.
Tax Reform. Some sort of tax reform is likely to happen. The stars have aligned with Speaker Paul Ryan, Chairman Hatch, Chairman Brady and Democratic Leader Chuck Schumer to work on a bi-partisan tax reform. As a part of this process, MHI will work to preserve the 45(L) credit for those builders producing energy efficient manufactured and modular homes. MHI will continue its active engagement with coalition partners and Congressional stakeholders, including those on the relevant energy and tax writing committees to ensure that this issue remains at the forefront of tax extension or tax reform legislation.