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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 36 August 2025 T H E E X C H A N G E D avid McCarthy is Managing Director, Head of Legislative Affairs at the CRE Finance Council (CREFC), where he leads the trade organization's advocacy efforts with federal lawmakers in Washington, D.C. In addition to representing the CRE and multifamily finance industry on Capitol Hill, David supports the overall CREFC government relations effort by advising and supporting CREFC's legislative and regulatory efforts with policy analysis and strategy. For more than three decades, CRE Finance Council (CREFC) has served lenders, investors, and servicers engaged in the nearly $6 trillion commercial real estate finance industry. More than 400 companies and over 19,000 individu- als are members of CREFC. Member firms include life company and bank balance-sheet lenders, securitized lenders, alternative, high-yield lenders, loan and bond investors, private equity firms, servicers, and rating agencies, among others. CREFC promotes capital formation, encouraging commercial real estate finance market efficiency, trans- parency, and liquidity. CREFC also acts as a legislative and regulatory advocate for the industry, playing a vital role in setting market standards and providing education for market participants. Prior to joining CREFC in 2016, David was an Assistant VP in the Regu- latory Affairs department at U.S. Bank in D.C.. David grew up in rural South- west Minnesota and graduated from Hamline University in St. Paul. He is a graduate of George Mason University School of Law. McCarthy also worked as a Legal Intern for the Subcommittee on the Constitution of the U.S. House of Repre- sentatives Committee on the Judiciary. MortgagePoint had a chance to chat with McCarthy regarding Section 899 of the One Big Beautiful Bill Act, a measure that takes aim at "unfair foreign taxes," specifically targeting the undertaxed profits rule (UTPR), digital services taxes (DSTs), and diverted profits taxes (DPTs). Section 899 was designed to increase the U.S. tax burden for investors tied to countries deemed to be engaging in unfair foreign taxation. Section 899 represents a shift in inter- national tax policy, designed to protect American economic interests. David McCarthy Chief Lobbyist & Head, Legislative Affairs, CRE Finance Council McCarthy shared his thoughts on Section 899 and its projected impact on the commercial real estate space both at home and abroad. Q: Why were real estate market participants concerned about a provision in the Reconciliation Bill known as Section 899? McCarthy: Section 899 would autho- rize the Treasury Secretary to impose re- taliatory taxes on certain foreign compa- nies and individuals in response to unfair tax practices abroad. Policymakers were aiming to defend U.S. tax sovereignty amid global tax minimum tax agreements by using the provision to apply punitive tax treatment when countries employ certain extraterritorial or discriminatory taxes against U.S. companies. While Section 899 could have served as a negating tool on the international stage, the real estate industry was con- cerned that the provision would broadly impact debt and equity investment into the U.S. The House and Senate version of the bill would have swept in passive, non-controlling foreign investments—in- cluding those critical to financing United States. commercial real estate. The added uncertainty around how Treasury might implement this authority—and who could be targeted—created real risk for capital inflows into U.S. markets. Q: Why was Section 899 such a concern when it comes to capital availability for U.S. borrowers? McCarthy: U.S. commercial real estate (CRE) relies on a global investor base as foreign capital plays a key role in portfo- lio lending, debt funds, securitizations, and other financing vehicles. Section 899 introduced the risk of higher, un- predictable tax rates for certain foreign investors, which could cause capital to pull back or require higher returns to compensate for new tax risk. That could