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Mortgage Overhaul Bill Clears House; FHA Reform Stalled
Responding to the turmoil in the nation's subprime markets, the House on Nov. 15 passed H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, by a vote of 291-127.
The bill, which seeks to to curb abusive mortgage lending practices, would require lenders to make sure borrowers have a reasonable ability to pay back a loan, bring mortgage brokers under a nationwide licensing registry, expand some limits on high-cost mortgages and establish some legal liability standards for mortgage securitizers. Lawmakers also adopted provisions from separate legislation (H.R. 3837) sponsored by Rep. Paul Kanjorski (D-Pa.) that would establish federal standards for appraisers and require certain borrowers to open escrow accounts along with their mortgages to protect against unexpected taxes and insurance premiums.
Prior to debate on the bill, NAHB sent a letter to every House member supporting efforts to address abuses in lending practices but also urging the Congress to "exercise caution in this process to avoid unnecessarily reducing the flow of mortgage credit during this time of market turmoil." Hammering home this message of caution, the letter added: "any legislative effort addressing mortgage financing should be mindful of the negative impacts a further constriction in mortgage credit could have on the housing economy as a whole."
Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said that he will soon introduce companion legislation in the Senate "that will be designed to provide strong standards and tough remedies to punish predatory lending and reward affordable loans. In addition, my legislation will address the abuses in the mortgage servicing industry, which, itself, is driving people unnecessarily into foreclosure."
FHA Setback in Senate
Meanwhile, an NAHB-supported bill to address the mortgage credit crunch stalled in the Senate this week. Senate Majority Leader Harry Reid (D-Nev.) sought to bring FHA reform bill S. 2338 to the Senate floor by unanimous consent but Sen. Tom Coburn (R-Okla.) objected, scuttling the bill for now. Senate passage of FHA reform would likely have resulted in legislation being enacted into law before year-end, since the House has already approved its version of FHA modernization. Coburn's action does not spell the end of FHA reform, but it most likely will delay any final congressional passage into early next year.
To view the legislation, click here and enter the bill number in the box in the upper center screen. For more information, contact Scott Meyer at 1-800-368-5242, x8144.
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Reid Takes First Step to Resolve Spending Impasse
Senate Majority Leader Harry Reid (D-Nev.) this week offered the first olive branch of the fiscal 2008 appropriations cycle when he proposed that Capitol Hill and the White House “split the difference” between the spending levels supported by the Congress and the President for the annual spending bills. Senator Reid was joined by several other Democrat senators in supporting a multi-bill omnibus appropriations package that would be sent to the President in December with a funding level approximately $11 billion above what the President had requested. The White House currently estimates that the proposed appropriations bills for fiscal 2008 would exceed the Administration's original request by $22 billion.
House leaders took no position on Senator Reid’s comments, and while a few Republicans indicated a willingness to start negotiating on the final spending number, Senate Minority Leader Mitch McConnell (R-Ky.) indicated that he was still of the belief that the White House was holding firm on its original spending ceiling for fiscal 2008. The White House seemed to brush off the idea of negotiating a number in between the congressional and Administration levels late on Thursday.
The strategy for handling the appropriations bills has changed frequently over the past few months, with lawmakers initially daring the President to veto spending bills that he felt were too excessive—a challenge that the President responded to on Nov. 13 by vetoing the fiscal 2008 Labor, Health and Human Services and Education spending bill, the largest of the domestic appropriations bills. The only fiscal 2008 bill signed into law thus far has been the Defense Appropriations bill. Many lawmakers are beginning to believe that with the first round of political posturing over the Labor bill completed, members of Congress and White House officials may now be in a place to sit down and begin to discuss how to complete the appropriations process for this year.
Congress continues to work on a few appropriations bills, with the House completing work on the fiscal 2008 Transportation and Housing and Urban Development (THUD) Appropriations bill, H.R. 3074. The THUD bill contains funding for most of the federal housing programs. While the House completed action on the THUD conference report, the Senate is not expected to work on the measure until it returns from the Thanksgiving recess in early December.
For more information, contact Jenna Hamilton at 800-368-5242, x8407.
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OSHA Issues Final Rule on Personal Protective Equipment
The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) on Nov. 15 issued its final rule on employer-paid personal protective equipment (PPE). Under the rule, all PPE, with few exceptions, must be provided at no cost to employees. However, OSHA’s new rule only addresses the issue of who pays for PPE, not the types of PPE that must be used.
The new rule states that the employer is required to pay for any PPE used by their own employees to comply with the PPE requirements of an OSHA standard. So, when an employer selects a specific type of PPE to be used at the workplace to comply with an OSHA stafety standard (such as helmets to protect against head injury from falling objects), the employer is required to pay for it. However, the final rule does contain a few exceptions. Employers are NOT required to pay for:
- Non-specialty safety-toe protective footwear, including steel-toe shoes or steel-toe boots
- Non-specialty prescription safety eyewear
- Ordinary clothing, such as shirts, pants, street shoes, and normal work boots
- Weather-related gear, skin creams, or other items used solely for protection from weather, such as winter coats, jackets, gloves, parkas, rubber boots, hats, raincoats, ordinary sunglasses, and sunscreen.
Also, this rule does not require payment for uniforms, caps, or other clothing worn solely to identify a person as an employee, nor does it require payment for items worn to keep employees clean for purposes unrelated to safety or health – such as blue jeans, aprons or other apparel – when worn solely to prevent clothing and skin from becoming soiled.
As for employers replacing PPE, the rule states that the employer must pay for replacement PPE, except when the employee has lost or intentionally damaged the PPE. Replacement of PPE under normal wear-and-tear will be determined by each OSHA standard that required PPE.
Lastly, OSHA addressed concerns about employees not returning company-owned PPE upon termination of employment. OSHA states in the rule’s preamble, that “if the employee does not return the employer’s equipment, nothing in the final rule prevents the employer from requiring the employee pay for it or take reasonable steps to retrieve the PPE, in a manner that does not conflict with federal, state or local laws concerning such actions.” OSHA also states that an acceptable alternative is a deposit system for PPE that provides an incentive for employees to return the equipment, so long as this method does not circumvent the rule resulting in an employee involuntarily paying for their PPE.
Employers must pay for the required PPE used by their own employees no later than May 15, 2008.
The entire text of the new OSHA employer-paid PPE final rule for construction is available by clicking here. For more information, contact Rob Matuga at 800-368-5242, x8507.
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