Federal Trade Commission (FTC) Begins Enforcement of the Red Flags Rule
As required by the Fair and Accurate Credit Transactions (FACT) Act of 2003, the FTC issued regulations in November of 2007 requiring financial institutions and creditors to develop and implement written identity theft prevention programs. These programs are meant to identify and detect relevant warning signs – or “red flags” – of identity theft. On December 31, 2010, the Federal Trade Commission (FTC) finally began enforcement of the Red Flags Rule.
The Red Flags Rule impacts land-lease communities under Section 315 and Section 114 of the FACT Act. Under Section 315, “landlords” or land-lease communities, as users of consumer reports from credit bureaus, are required to develop reasonable policies and procedures that must be applied when they receive a notice of address discrepancy from a consumer reporting agency. There is no requirement that the policies and procedures on address discrepancies be in writing. However, a written policy could assist in ensuring policies are being followed by all employees.
Land lease communities and retailers that offer financing or help consumers get financing from others by processing credit applications, would be categorized a “financial institution” or “creditor” and would therefore be impacted by Section 114 of the FACT Act. The rule requires financial institutions and creditors to establish written Red Flags Identity Theft Prevention Programs to detect, prevent and mitigate identity theft in connection with the opening of certain accounts or existing accounts.
The following activities would not require a written Red Flags Identity Theft Program: 1) the use of consumer credit reports solely for the purpose of qualifying applicants for residency; 2) simply referring customers to lenders, without handling credit applications. If a community or retailer is involved in the lending process, and thereby required to have a written Red Flags Identity Theft Prevention Program, they may be able to utilize the FTC-developed “Do-It-Yourself Template for Businesses at Low Risk for Identity Theft.”
Click here for more detailed information and compliance guidance.
MHI Briefs Congress on Finance and Energy Issues for Manufactured Housing
In late January, MHI industry members participated in a Capitol Hill briefing on energy performance in manufactured and modular homes. The briefing was hosted by the Environmental and Energy Study Institute (EESI) and the Congressional High-Performance Buildings Congressional Caucus. Witnesses included: George Mongrell, President and CEO of Terradime, LLC; Emanuel Levy of Systems Building Research Alliance; and Kevin Clayton of Clayton Homes, Inc.
Manufactured Housing Congressional Caucus co-chair Ken Calvert (R-CA) discussed the important role that manufactured housing plays in providing cost effective, high performance energy efficient housing but warned that the lack of available financing limits consumer accessibility to manufactured housing. “Many Americans lack the ability to buy a manufactured home due to lack of credit and capital available,” he said, adding “that is not right and needs to be fixed.”
Policymakers were urged to support the improvement of the Energy Star tax credit for manufacturers building Energy Star homes, provide a framework to help very low-income existing homeowners purchase new high energy performance homes, and remove existing regulatory barriers for adopting better energy standards for manufactured housing.
“Investing in highly energy efficient homes is a priority for the manufactured housing industry,” said Kevin Clayton. “We continue to push the envelope to find ways to deliver the best energy value for our customers. In the long term, this is not only a good thing for the industry, but it is also just the right thing to do.”
Obama Administration Releases Plan to Reform Housing Finance System
On February 11th, the Administration released its plan for reforming America’s housing finance market. The proposal offered three options for handling the major secondary market players, Fannie Mae and Freddie Mac - full privatization, a guarantee mechanism during crisis, and catastrophic re-insurance. The report outlined a number of additional specific policy recommendations meant to wind down the government’s role in supporting the mortgage market while encouraging more private capital investment. Responding to some of the policy recommendations contained in the report - moving toward increased down payments, the lowering of the GSE and FHA loan limits and the raising of guarantee fees and FHA premiums – policymakers appear to be adopting a more cautious approach as they consider potential impact on the fragile housing market recovery.
Click here for more information on the Administration’s report.
HUD’s FY2012 Budget Proposes a 51 Percent Increase in Manufactured Home Fees
The Department of Housing and Urban Development (HUD) has unveiled its fiscal year 2012 budget, which includes $14 million for the administration of the Manufactured Housing Program. The budget proposal is $2 million more than the budget in FY2010, and $2 million less than the amount being considered by Congress next week under a Continuing Resolution for the FY2011 budget of the United States.
The proposal is based on an increase of the label fee from $39 to $60 for each transportable unit ($4.8 million in fee income) and $2.2 million in user fees for services rendered under the dispute resolution and installation programs. In addition, HUD is requesting a direct Congressional appropriation of $7 million. According to HUD, the $7 million in additional funding is necessary because fee income, even with a fee increase, is not sufficient to carry out its mandated functions under the program.
HUD will need to issue rulemaking in order to increase the fee. MHI will likely challenge this steep increase.
HUD Announces New Appointments to the Manufactured Housing Consensus Committee
HUD has announced the new appointments to the Manufactured Housing Consensus
Committee (MHCC) and MHI Members Jeff Legault of Skyline Corporation, and Leo Poggione of Craftsman Homes, were selected as producer members to serve three year terms on the MHCC. The MHCC will hold a two day meeting in early March in Washington, D.C.
MHI Supports Senate Republicans Call for Slower Pace in Dodd-Frank Rulemaking Process
On February 15, all ten Republican members of the Senate Banking Committee signed a joint letter to the heads of six different federal agencies with responsibility for implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203). The letter expressed concern “that regulators are not allowing adequate time for meaningful public comment on their proposed rules” while also admonishing the agencies to engage in “deliberative and rational rulemaking.” The letter adds that “a review of Dodd-Frank rulemakings by the Committee on Capital Markets found that public comment periods are a little over forty days, which is substantially shorter than the sixty day minimum comment period generally required by the Office of Management and Budget.”
The letter highlights a number of other concerns and seeks additional clarification on the specific processes used in Dodd-Frank rulemakings.
Click here to read the letter.
GOP Issues Oversight Report
A preliminary report issued Feb. 10 by House Oversight Committee Chairman Darrell Issa (R-CA) argues that federal regulations are “harming U.S. competitiveness and contributing to unemployment…” The report identified numerous regulations as having the potential for significant negative impact, particularly with respect to small businesses.
For the housing and real estate industries, the report highlighted the problematic impact posed by the “nearly 500 rulemakings stemming from the Dodd-Frank Act that are scattered throughout a number of agencies”; and the Environmental Protection Agency (EPA) proposals to expand regulations affecting development and construction under the Clean Water Act.
The Oversight Committee report is part of a broader House GOP effort to scrutinize federal regulations and their impact on job creation and competitiveness. “A common misconception is that new regulatory requirements can translate into new compliance positions, which should help put people back to work,” the report says. “However, regulatory compliance burdens actually divert resources away from productive positions and channel investment toward compliance roles … Resources and personnel devoted to regulatory compliance are not able to contribute towards producing the goods and services that consumers value.”
To see a copy of the report, click here.