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Board of Governors of the Federal Reserve System
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Report to the Congress on the Effect of Capital Rules on Mortgage Servicing Assets


Section 634 of the Consolidated Appropriations Act, 2016 (the act), requires the Board of Governors of the Federal Reserve System (Federal Reserve), Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) (the federal banking agencies or agencies), and National Credit Union Administration (NCUA) to jointly conduct a study and issue a report on the appropriate capital requirements for mortgage servicing assets (MSAs) for banking institutions and federally insured credit unions.1

As required by the act, the study includes 2

  • the risk to banking institutions of holding MSAs;
  • the history of the market for MSAs, including in particular the market for those assets in the period of the financial crisis;
  • the ability of banking institutions to establish a value for MSAs of the institution through periodic sales or other means;
  • regulatory approaches to MSAs and capital requirements that may be used to address concerns about the value of and ability to sell MSAs;
  • the impact of imposing the Basel III capital requirements and the NCUA capital requirements on banking institutions on the ability of those institutions--

    • to compete in the mortgage servicing business, including the need for economies of scale to compete in that business, and
    • to provide service to consumers to whom the institutions have made mortgage loans;
  • an analysis of what the mortgage servicing marketplace would look like if the Basel III capital requirements and the NCUA capital requirements on MSAs--

    • were fully implemented, and
    • applied to both banking institutions and nondepository residential mortgage loan servicers;
  • the significance of problems with MSAs, if any, in banking institution failures and problem banking institutions, including specifically identifying failed banking institutions where MSAs contributed to the failure; and
  • an analysis of the relevance of the Basel III capital requirements and the NCUA capital requirements on MSAs to the banking systems of other significantly developed countries.


1. "Banking institutions," as used in this report, generally refers to insured depository institutions, bank holding companies, and savings and loan holding companies, but does not include federally insured credit unions, unless otherwise noted. Return to text

2. Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, 129 Stat. 2242 (2015). Return to text

Last update: August 12, 2016

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