On March 13, 2026, the White House issued an executive order that directs the Consumer Financial Protection Bureau (CFPB) and federal housing and banking agencies to consider a series of mortgage-related regulatory and supervisory changes, with a particular focus on community banks (generally under $30 billion in assets) and “smaller banks” (under $100 billion in assets). The order aims to “improve the availability and affordability of mortgage credit, tailor rules for community banks and “smaller banks” [and] reduce the regulatory burden on community banks.”
The order suggests potential changes to come for the mortgage industry – including modernizing of appraisal, mortgage and Home Mortgage Disclosure Act (HMDA) processes, focusing on underwriting effectiveness rather than technical process compliance, and generally easing perceived regulatory burdens in mortgage origination and servicing.
The order does not, on its own, amend existing rules. Instead, it tees up potential rulemakings, interagency guidance updates and program changes that could reshape core aspects of mortgage origination and servicing – ranging from underwriting and disclosure timing to data reporting, appraisals, and bank funding and capital treatment.
We summarize the key provisions below.
The order
Origination and closing standards
The executive order directs the CFPB to consider changes to Regulation Z that would tailor Ability-to-Repay (ATR) evaluations, Qualified Mortgage requirements and Truth in Lending Act–Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rules for smaller institutions. It also directs the CFPB to consider changes to the TRID framework by replacing existing timing requirements with a materiality-based standard intended to reduce closing delays.
In addition, the order suggests potential adjustments to points-and-fees caps for small-balance mortgages, updates to what counts as “reasonable compliance” in underwriting, modernization of rescission processes (including increased use of secure digital technology) and streamlining of certain refinance-related requirements under mortgage servicing rules.
Supervision posture: ‘Correction first’
The order directs the heads of the CFPB, Federal Reserve, National Credit Union Administration (NCUA), Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) to consider revising supervisory guidance to focus exams on the effectiveness of underwriting and ability-to-repay policies rather than process-heavy technical compliance. It also urges that good faith technical errors receive correction-first treatment, with enforcement limited to violations that result in borrower harm or constitute repeated misconduct.
HMDA reporting: Narrowing scope and easing burdens for smaller banks
Under the executive order, the CFPB is directed to consider amending HMDA’s implementing Regulation C by:
- Raising the asset threshold for HMDA data collection and reporting exemptions for smaller banks.
- Excluding “inquiries” from the reporting scope.
- Ensuring that disclosures adequately protect privacy and minimize operational burdens associated with data collection and reporting.
Capital, liquidity and Federal Home Loan Bank mechanics
The executive order directs the Federal Reserve, NCUA, FDIC, OCC and Federal Housing Finance Agency (FHFA) to consider tailoring capital rules and banks’ risk weights for portfolio mortgages, mortgage servicing rights and warehouse lines of credit to the “material credit risk” of the exposure. It also calls for modernizing the collateral valuation and transfer systems related to Federal Home Loan Banks (FHLB), expanding access to longer-dated FHLB advances tied to residential mortgage assets, and creating targeted FHLB liquidity programs for entry-level housing and small residential builders.
The order instructs the FHFA to submit a report within 120 days on national housing finance market efficiency and recommendations to address regulatory or oversight gaps.
Construction lending and concentration guidance
The order calls on the CFPB, Federal Reserve, NCUA, FDIC and OCC to consider revising supervisory guidance to exclude one-to-four family residential development and construction lending from commercial real estate concentration guidance to support “responsible construction lending by community banks.”
Appraisal and digital mortgage modernization
The order supports appraisal modernization, urging the Federal Reserve, CFPB, NCUA, FDIC, OCC and FHFA to consider expanding the use of alternative valuation models, desktop and hybrid appraisals, and artificial intelligence (AI) valuation tools, while also simplifying appraiser qualification requirements, reducing appraisal requirements for certain low-risk transactions and setting clearer appraisal timelines. It also encourages alignment between the appraisal standards under the Departments of Housing and Urban Development (HUD) and Veterans Affairs (VA), where risk is comparable.
The order also encourages digital mortgage modernization by directing the Department of Agriculture, VA and FHFA to consider eliminating unnecessary wet-signature requirements, standardizing acceptance of electronic signatures, electronic notes and remote online notarization, and promoting digital mortgage standards.
Servicing and supervision
The order directs HUD, the Federal Reserve, CFPB, NCUA, FDIC and OCC to consider simplifying loss mitigation requirements and issuing a proposed rule that would exempt smaller banks from complex mortgage services. It also directs the agencies to consider shifting the focus of supervisory evaluations of well-performing underwritten portfolio loans away from technical defects and, similar to examinations for banks, extending “cure-first” standards to good faith servicing errors.
Enforcement and licensing
The order further suggests that the Federal Reserve, CFPB, NCUA, FDIC and OCC consider policies against enforcement actions for violations of consumer financial laws. In particular, the order suggests the following philosophies guide the suggested policy updates :
- Discourage civil money penalties unless violations are willful, knowing or reckless.
- Provide institutions opportunities for self-identification and remediation.
- Consider good corporate conduct, such as the correction of good faith, technical compliance errors.
These agencies are also directed to consider eliminating duplicative or unnecessary requirements regarding licensing or registration for mortgage loan officers of any smaller banks.
What’s next?
This year, Washington has been intently focused on housing affordability and availability. This executive order was accompanied by a second one aimed at increasing the housing supply through deregulation. The Trump administration previously issued an executive order in January to limit large institutional investors from purchasing single-family homes. And, on March 12, the Senate passed a significant bipartisan housing bill aimed at improving housing affordability and availability, following the House of Representatives’ passage of its own bill in February. The two chambers are currently working to reconcile the two bills.
As noted, the mortgage credit executive order does not revise existing statutes or regulations on its own. It primarily directs agencies to consider rulemaking, guidance updates and program changes. As a result, many of the items flagged in the order – particularly those that would require notice-and-comment rulemaking or coordinated interagency action – could take time to propose, finalize and operationalize across the mortgage ecosystem. The agencies may also need to navigate any implications of final congressional legislation, if passed.
That said, entities can begin now to position themselves to respond to potential changes. By tracking agency actions, identifying operational pressure points, planning for implementation pathways, and engaging key vendors to understand lead times and configuration constraints, entities can ensure readiness in the face of future regulatory changes.