As the reverse mortgage industry’s foremost advocacy and educational body, the National Reverse Mortgage Lenders Association (NRMLA) often interacts with stakeholders at every level of the business. From loan originators up through company executives, NRMLA’s membership encompasses a vast swath of the industry’s key players, but also has to interact on a regular basis with members of local, state and federal governments in an effort to maintain access by seniors to reverse mortgage products.
Government relations is only part of what NRMLA undertakes on a regular basis, but the nature of the Home Equity Conversion Mortgage (HECM) program as a unique public-private partnership makes such relations work very important. NRMLA President Steve Irwin spoke to RMD about the association’s efforts in this regard recently at RMD’s virtual event HEQ: The Future of Home Equity in Retirement.
Government relations only part of the equation, but an important one
While important, government relations only encompasses a portion of NRMLA’s efforts on a daily basis, Irwin explains.
“We work [on] a variety of HUD issues, a variety of Ginnie Mae issues, a slew of risk and compliance issues,” Irwin says. “We’re very busy offering educational opportunities for our members and non-members, and we manage a professional designation program. We handle PR matters and we work on member engagement efforts. We also produce a variety of events throughout the year and manage a half-dozen or so committees.”
Still, the facts concerning how the HECM program itself came into being as an act of Congress requires the industry to be deferential to government regulation and oversight, requiring NRMLA to engage regularly with important committees and legislators across both sides of the partisan aisle.
“[HECM] was a program launched by the National Housing Act, and that will necessitate our engaging with lawmakers on Capitol Hill, as well as with any given administration that’s leading the executive branch,” Irwin explains. “Additionally, there are new pieces of legislation to come out of Capitol Hill and get crafted periodically, which will impact directly – and possibly indirectly – the reverse mortgage space. So, we find ourselves engaging with members of Congress from both sides of the aisle on the House Financial Services Committee, and the Senate Banking and Housing and Urban Affairs Committee. And we also interact quite frequently with the Senate Special Committee on Aging.”
Other government entities in Washington requiring at least some of NRMLA’s time in a given year include the Office of Management Budget (OMB), the Congressional Budget Office (CBO), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision, the Federal Reserve, the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), and of course the Department of Housing and Urban Development (HUD).
NRMLA also receives the occasional inquiry from legislative offices, and is sometimes called to offer testimony in official proceedings from Congress.
“If there is a constituent that may need some assistance – [including someone] who may have a reverse mortgage issue – we find ourselves getting contacted by legislative offices,” Irwin explains. “And then of course, we’re also called on to testify in front of various committees up on the Hill, and [NRMLA CEO] Peter Bell has done a tremendous job of representing our members, and the seniors our members serve at these hearings.”
Most recently, Bell provided testimony at a hearing of the House Financial Services Subcommittee on Housing, Community Development, and Insurance in September, 2019.
Reverse mortgages: not a ‘hot-button’ issue, but interacts with a lot
You may not often find political incumbents or candidates making an abundance of public-facing statements specifically about the reverse mortgage product category or home equity release, but that lack of widespread political conversation should not diminish the fact that the reverse mortgage concept itself is involved with, or adjacent to many pressing issues that American society faces today, Irwin says.
“I would posit that through the HECM program, HUD is offering a really unique public policy solution to the looming financial challenges of America’s aging population,” Irwin says. “What is a key issue is the understanding that by 2030, there will be more than 74 million adults aged 65 and older in the U.S., accounting for some 20% of the population. The 65 and older cohort will eclipse the total number of Americans who are under 18 years of age, and this aging population will have longer lifespans and more years spent in retirement outside of the paid workforce.”
The additional fact that people are just living longer also means that questions about the longevity of their finances and assets will naturally come into play, and a reverse mortgage is one possible solution designed to enhance finances in retirement.
“One-in-four 65-year olds today are expected to live past the age of 90, and 1-in-10 are expected to live past 95, so people are living longer than ever before,” Irwin says. “And rising healthcare costs often lead to unexpected expenses that can drain retirement savings. There’s the Social Security side of the equation, Social Security provides most of the retirement income for about half of the households age 65 and older, but replaces only 40% of pre-retirement savings.”
This leads to the potential for the reverse mortgage product category – and home equity tapping more broadly – to have a very important and pronounced impact on the ability of seniors to retire on their terms, Irwin explained.
“The looming financial challenges of an aging population is certainly front-of-mind for the candidates running for the majority of offices,” Irwin says. “I think you will find that both parties’ platforms speak to retirement and retirement security, and it’s part of what our government relations effort [entails] is to inform and educate how the responsible use of home equity for the right person at the right time under the right circumstances can mitigate the financial risks of retiring today.”
More to come at upcoming industry conference
When reached to provide a more recent perspective on how government relations impacts NRMLA’s activities, particularly as more recent issues like the LIBOR transition and the impending November general election come up, Irwin says that many of these topics are going to be explored at an upcoming industry conference hosted by the association.
“NRMLA’s legislative team will be speaking about election outcomes, and the government relations priorities coming out of the November election at the 2020 NRMLA Virtual Annual Meeting & Expo,” Irwin explained in a phone call with RMD.
There is still time to register for the upcoming event, according to Irwin. RMD will also be in virtual attendance, so feel free to send us an email if you’d like to “meet up” virtually.