When he takes over as chairman of the Mortgage Bankers Association after its annual meeting in October, Robert M. Couch hopes to help the trade group continue to come back from a tumultuous time.
He also plans to work toward ending the proliferation of state laws on predatory lending. In an interview with American Banker last week, Mr. Couch called the state laws an unworkable patchwork that he would like to see replaced by national standards, preferably by making use of existing federal consumer protection laws instead of writing new ones.
Predatory lending is a real problem, he said, but state-by-state solutions do more harm than good.
"We need to use a scalpel to get those bad actors, not a chain saw that will deprive subprime markets of capital," he said.
"Let's make it a federal scalpel that would be applied uniformly across the country," he added, echoing remarks he made last month in a speech to the National Conference of State Legislatures.
Mr. Couch, 46, is the president and chief executive officer of New South Federal Savings Bank in Birmingham, Ala., and a managing director of its commercial and multifamily mortgage unit, Collateral Mortgage Ltd.
He said he is satisfied with the direction the MBA, which is based in Washington, is now headed. Following several years of budget woes, staff turnover, and a weakened voice, the group is back on track, he said. "If you're looking for an overriding theme for my year, it's Continuing the Momentum. "
Though state laws against predatory lending differ - Georgia's is considered especially harsh, while North Carolina's is viewed as a more acceptable compromise - Mr. Couch said they all deprive deserving would-be borrowers and undermine an industry that has buoyed the U.S. economy during its current slump.
"If you ask me what I'm going to spend a lot of time on, this is it," he said. In June the MBA announced it would establish a group to develop a best-practices code and would look at ways to fund regulators' enforcement.
National standards on what is commonly called predatory lending - which the MBA prefers to term abusive or fraudulent lending, Mr. Couch said - may not ban some of the practices that current state laws ban.
But balloon payments, prepayment penalties, and high-loan-to-value mortgages, for instance, have been unfairly targeted, Mr. Couch said. "Each one of these practices can be abused, but none of those practices are abusive on its face."
Another step at the federal level that mortgage bankers would support, he said, is the Department of Housing and Urban Development's proposed reforms to enforcement of the 1974 Real Estate Settlement Procedures Act, which would encourage the bundling of settlement services into packages with up-front guarantees.
The reforms would make consumers less vulnerable to abusive lenders by enabling them to compare costs more easily, he said. Though it has asked HUD for some modifications, the MBA's general backing of HUD's Respa-reform plan has been exceptional, observers said.
With regard to policing predatory lending, Mr. Couch said he would prefer stronger enforcement of existing federal laws - as well as consumer education - to current state laws, which many lenders avoid by exploiting preemptions allowed by federal charters.
Mr. Couch's concern with legal matters can be explained by his background. After earning undergraduate and postgraduate law degrees from Washington and Lee University in Lexington, Va., he practiced law for several years, taking some time out along the way to explore accounting and become a certified public accountant.
Starting out, he clerked for the Lewis F. Powell Jr., an associate justice of the U.S. Supreme Court, and for John M. Wisdom at the U.S. Court of Appeals for the Fifth Circuit.
Before joining New South Federal about a decade ago, Mr. Couch held the unusual title combination of general counsel and chief financial officer for First Commercial Bancshares, a bank holding company also in Birmingham. He also served nine months as the chief strategic officer at Synovus Financial Corp. of Columbus, Ga.
When it comes to heading the trade group, which had several lean years, Mr. Couch said he has faith that its current leadership, including its full-time president and CEO, Jonathan Kempner, has a plan in place that is working. (The chairmanship rotates annually among member executives.)
The challenges have included "getting the fiscal house in order, strengthening our staff," and expanding education programs, he said.
Mr. Couch said the MBA has made "a lot of progress in establishing ourselves as the voice of the real estate finance industry" but that it can do more to forge a united front on certain issues. Indeed, it has yet to take a stand in the recent debate over whether and how to overhaul regulation of the government-sponsored enterprises.
According to Angela Lazear, the MBA's chief financial officer, the association is on track to earn $2.5 million this fiscal year, which ends Sept. 30, before earnings from its investment portfolio. That compares to an operating loss of $800,000 last year and expectations at the start of this year for a $2 million loss. Between 1999 and it 2002 it spent $17.6 million more than it collected in revenues.
Meanwhile, its investment portfolio, which suffered during the stock market doldrums, had returned 19% through the end of June, growing to $42.4 million, Ms. Lazear said.
John A. Courson, the MBA's current chairman, said Mr. Couch will get help in setting the association's direction from a team of officers that will also include the next chairman-elect and the vice chairman, as well as its board of directors and full-time staff. "You never feel like you're out there on an island by yourself," Mr. Courson said.
