CREFC and MBA. MBA and CREFC. Tied at the hip. Danny Kaye and Bing Crosby? (For those of an age or inclination to have watched White Christmas recently). After a period of open and somewhat notorious and perhaps a little embarrassing competition, these two trade organizations have to settle down and get along for the benefit of the industry which they both serve. The good news is that the early indicators are positive.

It is a curious state of affairs but the commercial side of MBA and CREFC, for many years, very effectively represented the commercial mortgage finance industry in a sort of sloppy, overlapping and certainly inefficient way. The trade organization version of what the psychologists call parallel play in children. Same sandbox, same toys, limited and suspicious interaction. MBA traditionally represented portfolio lenders and mortgage bankers; CREFC tended to the investors and sell-side bankers. Both claimed the affections of the servicers. (Both ignore the bulk of the commercial banks, but that’s another story). Both held solid, value added meetings and did important advocacy and education.

When things got bad and budgets got tight in 2008, everyone started thinking, “Wouldn’t it be great if we had one trade organization to represent the entire commercial finance industry; one set of dues to pay, one set of sponsorships, one set of annual meetings to attend?” As Samuel Johnson (pdf, page 285) said about the gallows, such a time of trouble focuses the mind most wonderfully. Collapsing membership revenues set both CREFC and MBA dreaming the dream of a global, galactic industry-spanning organization. So, both organizations during the “late unpleasantness” launched initiatives to broaden their remit, made organizational changes (a new name in the case of CREFC), adjusted their mission and started recruiting new members. After much huffing and puffing, there are indeed a couple of mortgage bankers in CREFC and a couple of investors who are members of the MBA. Both nominally have embraced strategic plans to be the one source trade organization for the CRE space.

Neither is going to win this mud wrestling match and, indeed, I think both are reconciled to that in their heart of hearts. Can you really see legions of mortgage bankers hanging with investment grade bond investors? Really?

Let’s face it, both organizations represent a unique value proposition and both are vitally important to the successful operation of the commercial finance market.

Several times over in the past couple of years, I was a fan of the one organization model. And perhaps, someday, we’ll get there. But for the moment, it’s not happening. That train has left the station. We will continue to attend meetings of both the MBA and CREFC, and pay two sets of dues and sponsorships. Let’s all recognize this reality, waste no more energy on competition and get our trade organizations to stick to the knitting. CREFC has its hands full with the reflation of the capital markets. There is no shortage of important initiatives for the MBA to tend to.  These organizations which, after all, work for us (although sometimes it seems that we act as if they don’t) need to move beyond competition and embrace cooperation.

By Rick Jones.