FATCA, Mortgages, China: A Busy Week for SIFMA

It’s been a busy week for our advocacy team here at SIFMA. This past week, SIFMA and representatives of our member firms testified (or submitted testimony) to the Internal Revenue Service, the California State Legislature, and Congress.

On Tuesday, Nicole Tanguy, Director and Tax Counsel at Citigroup Inc testified on behalf of SIFMA before the Internal Revenue Service to address the IRS’ proposed regulations implementing the Foreign Account Tax Compliance Act (FATCA). The main issue, among others, Tanguy addressed was the proposed timelines for implementing FATCA, specifically the need push back some compliance deadlines from 2013 to 2014.

More on SIFMA’s thoughts on FATCA here.

Also on Tuesday, SIFMA today submitted a letter to the Conference Committee of the California State Assembly and Senate to provide a focused discussion on how the mortgage servicing legislation the Committee is considering relates to the secondary mortgage markets that fund the vast majority of credit for California borrowers.  SIFMA has a number of significant concerns with the legislation, its impact, and the process by which it is being considered. The letter is available here.

The primary source of SIFMA’s concern with the legislation is the way in which it exceeds the bounds of the recently negotiated Attorney General settlement and calls into question the ultimate ability of a servicer or secondary market participant to access the collateral that backs a loan in the event that a foreclosure is unavoidable.

SIFMA is supportive of efforts to provide sensible loan modification and other foreclosure alternatives to troubled borrowers, but unfortunately loan modifications will not always succeed.

Finally, on Wednesday, SIFMA’s David Strongin testified before the House Financial Services Subcommittee on International Monetary Policy and Trade to discuss market access in China and progress made in the Strategic & Economic Dialogue (S&ED).

In his testimony, Strongin identified five key and interconnected industry priorities to help ensure a more level playing field for SIFMA’s members currently in China. Strongin also addressed the recent commitments and results stemming from the 4th S&ED held in Beijing. Strongin noted that the S&ED plays a key role in advancing the U.S.-China economic relationship and provides the best forum for constructive, high-level engagement on priority issues, including financial services market access.

Lastly, Strongin noted that more work needs to be done to ensure U.S. financial services firms are able to operate on a level playing field in China. Strongin put forward two recommendations to the Subcommittee to help ensure these commitments are met:

  • An annual report to Congress demonstrating China’s implementation of commitments agree to at each S&ED; and
  • Increasing the frequency of the economic portion of the dialogue to twice per year as was done during the original Strategic Economic Dialogue.

To read Strongin’s full testimony, click here.

That wraps up our week at SIFMA. The Senate is in session next week while the House is in recess for the Memorial Day holiday. Have a good weekend everyone!

Kenneth E. Bentsen, Jr – Executive Vice President, Public Policy & Advocacy, SIFMA
Randy Snook – Executive Vice President, Business Policies & Practices, SIFMA