The House today passed H.R. 1624, a bipartisan, ABA-backed bill that would expand banks’ ability to count municipal securities as high-quality liquid assets under the Liquidity Coverage Ratio. Introduced by Rep. Luke Messer (R-Ind.), the measure passed by a voice vote. The American Bankers Association supports a similar bill in the Senate championed by Sens. Mike Rounds (R-S.D.) and Mark Warner (D-Va.).
This measure passed the House in the previous congress. Due to the role banks play as investors in municipal markets, expansion of the HQLA definition is expected to be beneficial for all banks — not just those covered by the LCR.