Eight trade groups representing lenders are urging federal regulators to revise bank capital rules by adopting a more tailored risk weight for mortgages held on balance sheets and by significantly cutting the capital charge applied to mortgage servicing rights (MSRs).

In a letter sent Friday to the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, the groups argued that current capital standards have discouraged banks from originating, servicing, holding and securitizing mortgages.

“This has reduced competition, consumer choice and credit availability for aspiring homeowners,” the organizations wrote. 

The letter was signed by details ⇒

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