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50 ADDRESSING PRIVACY IN FINTECH AND HOUSING e Senate Committee on Banking, Housing, and Urban Affairs recently held a hearing on "Privacy Rights and Data Collection in a Digital Economy." Witnesses included Peter Chase, Senior Fellow for the German Marshall Fund of the United States; Jay Cline, Privacy and Consumer Protection Leader and Principal at PwC US; and Maciej Ceglowski, Founder of Pinboard. "My concerns about big data collection go back as far as the creation of the CFPB, which was collecting massive amounts of personal financial information without an individual's knowledge or consent," said Chair Mike Crapo in his opening statement. "Consumers deserve to know what type of information is being collected about them, what that information is being used for and how it is being shared," Crapo added. e witnesses discussed the impact of the EU's General Data Protection Regulation (GDPR) in the U.S., and how it differs from the 1995 Data Protection Directive. "While it is too soon to draw definitive conclusions about the GDPR, there is a tension between its concept of user consent and the reality of a surveillance economy that is worth examining in more detail," Ceglowski said. "A key assumption of the consent model is any user can choose to withhold consent from online services. But not all services are created equal—there are some that you really can't say no to. Take the example of Facebook. Both landlords and employers in the United States have begun demanding to see Facebook accounts as a condition of housing or employment." Crapo noted that the use of personal data can "provide value, such as risk mitigation, fraud prevention, and identity verification, or to meet the requirements of laws or regulations." "However, in many other cases, that data can be used in ways that have big implications for their financial lives, including to market or make decisions on financial products or services that impact a consumer's access to or cost of credit and insurance products, or in ways that impact their employment prospects." FANNIE AND FREDDIE'S UMBS: PROS AND CONS As Fannie Mae and Freddie Mac launch their combined bond, the uniform mortgage- backed securities (UMBS) questions arise about if the change will negatively or positively impact the mortgage market and affordability, Bloomberg reports. is change would "virtually eliminate the distinction between bonds issued by Fannie Mae and Freddie Mac, which guarantee nearly half of U.S. residential mortgages," with the combined security intended to help improve market liquidity and mitigate investor risk. However, while some believe this change will lower mortgage rates, critics argue the opposite may happen. e combined security launched on June 3, as the last step in a "more than five-year process to unify a roughly $4.4 trillion pile of agency mortgage-backed securities (MBS) currently split between the two government-sponsored enterprises." "It already was the most liquid market in the world in many respects. What are they trying to fix, exactly?" Walt Schmidt, Head of Mortgage Strategies at FTN Financial in Chicago, told Bloomberg. According to experts, the final outcome can't be said until after the launch of the combined bonds. "To some extent June 3 will be a bit analogous to Y2K, you don't know if everything will be successful until after the fact," Jay Bacow, head of Morgan Stanley's MBS research team, told Bloomberg. He added that "the mortgage market is second to Treasuries in terms of fixed-income liquidity and it's challenging for us to see it losing that distinction under UMBS." In April, Freddie Mac announced that its Investor Reporting Change Initiative (IRCI) would revise single-family investor reporting requirements beginning in May 2019, including moving the investor reporting cycle from mid-month to end-of-month and updating remittance cycles. e GSE stated that it is making the changes to promote alignment and industry standards for the UMBS. In March, the Federal Housing Finance Agency (FHFA) issued a final rule that requires Fannie Mae and Freddie Mac to align programs, policies, and practices that affect the cash flows of "To-Be- Announced" (TBA)-eligible Mortgage-Backed Securities. e agency statement indicated that this is a major step forward.

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