Politics makes strange bedfellows, an axiom that is playing out in Texas, where some of the state's recent laws have big banks pulling out of its municipal bond market because of their commitment to environmental, social and governance (ESG) investment principles. However, those bonds underwrite affordable housing in Texas, another important focus of ESG.
Senior Mortgage Reporter Bill Conroy takes a very interesting dive into the subject in his latest article, where he outlines why JPMorgan Chase, Citigroup, Bank of America and Goldman Sachs have paused their bond buying. From the article:
Texas Senate Bill 19 (SB 19) requires companies doing business with state agencies, including bonding authorities, to certify that they do not "discriminate against the firearm or ammunition industries," according to a research report issued by the Kroll Bond Rating Agency. SB 13 similarly seeks to protect Texas' energy industry by barring "state investments in companies that restrict business activities with the oil and gas industry," Kroll reports.
Big banks have policies around both of those thorny issues so they had to bow out of the municipal market. With their exit, new players are stepping in who aren't doing business by the ESG playbook — yet supporting affordable housing in the process. Makes total sense, right?
Mortgage Cadence has been busy investing in building the best LOS on the market, while the competition focuses on acquiring ancillary service providers as their core technology ages... Learn More!
Four leading municipal bond underwriters recently chose to pull out of the Texas municipal bond market on the heels of two laws that went into effect in September. It could have implications for affordable housing. HW+ Premium Content
The DigitalTax Portfolio Monitoring solution provides powerful visibility into trending and identification of changes in the customer's property characteristics, which then incites action and initiates true risk management, enabling a better experience for the homeowner. Presented by CoreLogic
With forbearance and foreclosure moratoriums ending, complying with regulations is critical. In this webinar, experts discuss servicing compliance regulations/strategies that leading organizations are implementing to prepare for regulatory audits. Learn More!
Sponsored by ACES Quality Management
HousingWire, 433 East Las Colinas Blvd., Suite 830, Irving, TX 75039, (469) 893-1480
EmoticonEmoticon