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In This Issue
Clean Water Act
Federal Appeals Judge Scraps EPA Veto, Agrees with NAR on Mountaintop Coal Mine
REOs
Federal Reserve Issues Policy Statement on Rental of REOs
Clean Water Act
Federal Appeals Judge Scraps EPA Veto, Agrees with NAR on Mountaintop Coal Mine
U.S. EPA overstepped its authority when it vetoed a Clean Water Act permit issued for a sprawling mountaintop-removal coal mining project in West Virginia, a federal judge ruled today. At issue is EPA's veto last year of the "dredge and fill" permit issued by the Army Corps of Engineers in 2007 for Arch Coal Inc.'s Spruce No. 1 mine in Logan County. It was the 13th time that EPA had used its veto power under Section 404 of the 1972 Clean Water Act, but it was the first permit blocked retroactively. The agency argued it needed to act to protect waterways from debris generated by the massive mountaintop project.
NAR and several other regulated stakeholder associations wrote an amicus brief to the Court supporting the contention that EPA did not have authority to veto a permit previously issued by the Army Corps of Engineers and reviewed by EPA.
But U.S. District Court Judge Amy Berman Jackson for the District of Columbia ruled that EPA did not have the power to scrap a permit that the Army Corps had already issued. "Based upon a consideration of the provision in question, the language and structure of the entire statutory scheme, and the legislative history, the Court concludes that the statute does not give EPA the power to render a permit invalid once it has been issued by the Corps," Berman Jackson wrote in a 34-page opinion.
Russell Riggs, 202-383-1259
Austin Perez, 202-383-1046
Daniel Blair, 202-383-1089
REOs
Federal Reserve Issues Policy Statement on Rental of REOs
On Thursday, April 5, 2012, the Federal Reserve Board (Fed) issued a policy statement clarifying policies regarding the rental of REO properties acquired by banks through foreclosure. In the statement, the Fed explained that its general policy is for banks to act in good faith to dispose of properties at the earliest practicable date, but that the renting of REO properties within statutory and regulatory limits is consistent with this policy in light of the extraordinary market conditions. Additionally, the Fed notes that existing federal and state laws and regulations limit the amount of time banks may hold REO properties (generally for up to five years), and that banks should pursue clear and credible approach for the ultimate sale of the properties within the applicable holding-period limitations. Banks that use third party venders to manage these properties, such as real estate agents or professional property managers, are expected to implement policies and procedures to ensure such individuals have appropriate expertise, are in sound financial condition, and have good track records in managing similar properties.
In a letter sent to six regulators, including the Federal Reserve, on March 28, 2012, President Moe Veissi recommended that regulators take a cautious approach when evaluating the benefits of rental programs versus other foreclosure prevention efforts that focus on keeping families in their homes as homeowners, including the Treasury Department’s HAMP and HARP programs. NAR will continue to monitor these programs to ensure that the prohibition on banks in real estate is not violated.
Federal Reserve Policy Statement
Charles Dawson, 202-383-7522
William Gilmartin, 202-383-1109
Jerome Nagy, 202-383-1233