Q&A: CREFC’s Justin Ailes Is the Lobbyist Par Excellence of the Finance Industry

Ailes spoke with Commercial Observer about the importance of advocating for those in the commercial real estate finance industry, especially in the wake of the COVID-19 pandemic.

Commercial Observer: Characterize your responsibilities for the CREFC and what your job entails.

Justin Ailes: My role is to help Congress and policymakers understand how what they are doing impacts commercial real estate finance. The role also helps the finance industry understand what Congress and regulators are doing and how it impacts them and figure out where we need to go. I’m really a translator between people in sophisticated important financial markets and people in political and regulatory positions.

CREFC has an office in D.C., in addition to New York, and I do spend a lot of time on Capitol Hill. The thing about lobbying is you need to show up and you need to be where people are. That means spending a lot of time at hearings or in meetings with congressional staff and members of Congress. You want to make sure you’re likable. You want to make sure the people you’re interacting with see you as a good person with good information and someone who is credible. You have to be able to articulate complex ideas and why what we do is important.

Commercial real estate finance isn’t something a whole bunch of people think a lot about, but it’s a $4.4 trillion market and it’s an important part of our economy. Teaching people that and reminding people of that is really the role.

What are some of the big things you are advocating for in 2020?

Before the crisis hit, some key issues we were spending a lot of time on were beneficial ownership and combating money laundering in real estate, and we’re also spending a lot of time on multifamily housing affordability.

How has your focus changed with the COVID-19 pandemic?

So much of our energy now is on making sure that there is adequate liquidity for the commercial real estate market and that runs from tenants to owners to servicers and on to investors. You want to make sure there is adequate liquidity so that when the economy starts going again, we have adequate supply to meet demand. 

The other big component of this is responding to questions and providing education and information to borrowers about how to work with servicers and how programs like forbearance work.

With the limitations today, is the way you advocate changing? Are you still able to connect with people in the same way? 

This is a personal relationship based, in-person kind of work, but now it’s all done digitally. People that we used to spend time with in the offices, we’re now emailing and getting on the phone with and sharing information that way. It has definitely changed how we work.

Everyone in our office is on Zoom and we’re doing virtual watercoolers each day, which is a good way to see people and connect. 

The government has so much to deal with right now; how do you get your wants and needs across and make sure the CREFC is being listened to at a time like this?

High communication and lots of follow-up. Different methods of communication. An email, text message and phone call — you just have to stay on top of things. We have always worked around the clock, and there’s still a lot of information and communication going on at all hours, seven days a week.

How has this affected what you had planned to be lobbying for and advocating for pre-coronavirus? It must have put some things on the backburner.

There are some things that may be put off, things like the SEC looking at rating agencies. But to a large extent, many of the regulations are still going through the regulatory process, though it may be temporarily delayed.

On [April 16], the Home Mortgage Disclosure Act (HMDA) Reporting was updated by the Consumer Financial Protection Bureau, raising the loan-volume coverage thresholds for financial institutions reporting data, so that’s a good positive example of how things are staying the same, even though the world around us has changed.

What have your conversations been with members since this began? What are they worried about and asking about?

So much of it is around liquidity and dealing with relief requests and programs. We’re spending a lot of time with trade associations, representing hotels and retailers to try to understand what they are hearing from their members about how it’s going working with their servicers and we’re pushing information out to them as well. Everyone is trying to digest how this impacts rents and all of that. It’s a lot of high-touch, frequent-touch kind of work.

Do you ever coordinate with other lobbyists advocating for the real estate industry?

We do work together quite a bit. We’re all representing member companies for interests that are oftentimes aligned, though not always. Knowing each other and having the ability to multiply your voice by doing work with coalitions is an important thing to do. We work closely with groups like the Multi Family Housing Council on issues like housing affordability, or the Mortgage Bankers Association on the Community Reinvestment Act. So, coalition work is a huge deal.

Do those you’re dealing with tend to stick to party lines? How steadfast are people in their beliefs on issues and is there enough wiggle room to change minds? 

I wouldn’t say “wiggle room” but there’s a lot more agreement that most folks probably realize. There is a lot more bi-partisan agreement that happens in Congress than you might see from watching it on TV. A good example of this is on housing affordability. There’s a bill that’s bipartisan that is working through both the House and the Senate and you have people on the Senate Banking Committee and on the House Financial Services Committee — Democrats and Republicans who agree this is a smart thing to do.

Another example is the Community Reinvestment Act. There are concerns from both Democrats and Republicans that the way the regulation is proposed to change may not do what people want it to do. It’s less partisan than what you might see from opening up Twitter or turning on your television.