The American Bankers Association today voiced support for several provisions in a legislative package intended to boost housing availability in the U.S., including language to raise supervisory thresholds for community banks and to encourage new bank formation. The House later passed the bill by a 390-9 vote.
The Housing for the 21st Century Act (H.R. 6644) is a bipartisan housing package advanced by the House Financial Services Committee. In a letter to House leaders, ABA applauded policy initiatives to create affordable housing and listed the provisions of the bill it supports. They include:
- Increasing the Public Welfare Investment cap from 15% to 20% for banks regulated by the Office of the Comptroller of the Currency and the Federal Reserve.
- Raising the total asset threshold from $3 billion to $6 billion under which institutions qualify for a limited-scope examination directly after an on-site, full-scope exam. The bill also would raise the total asset threshold under which institutions qualify for an 18-month exam cycle from $3 billion to $6 billion.
- Requiring federal banking agencies to streamline and simplify the new bank application process. It would also allow applicants to request a designated caseworker within the regulatory agency to assist with the process.
- The creation of a pilot two-year phase-in period of federal capital requirements for new banks.
- Requiring the Government Accountability Office and appropriate federal banking regulators to issue reports detailing the causes of bank failures, regulatory actions and any management or supervisory shortcomings, within certain specified timeframes after the FDIC invokes the systemic risk exception.
- The establishment of a Financial Agent Mentor-Protégé Program within the Treasury Department to strengthen minority, rural and small financial institutions and expand access to housing credit. The bill also would require federal regulators to jointly study ways to improve the growth, capital adequacy, and profitability of rural depository institutions.
In a statement after the House vote, ABA President and CEO Rob Nichols said the legislation will help level the regulatory playing field for community banks.
“These measures provide regulatory and examination relief for smaller banks, incentivize the formation of new banks and increase transparency around the FDIC’s resolution authorities,” he said. “We commend Chairman French Hill, Ranking Member (Maxine) Waters and members of the House Financial Services Committee for their leadership in assembling and advancing this bipartisan legislative package.”
