Alert July 30, 2013

Community Lending Enhancement and Regulatory Relief Act of 2013, Which Would Provide Relief to Community Banks, is Introduced in U.S. Senate

On July 24, 2013, Senators Jerry Moran (R-Kan.), Jon Tester (D-Mont.) and Mark Kirk (R-Ill.), introduced a bill, the Community Lending Enhancement and Regulatory Relief Act of 2013 (the “CLEAR Relief Act of 2013”), S. 1349, which is similar to House bill H.R. 1750, a bill that was introduced in April 2013.  If passed, the CLEAR Relief Act of 2013 would provide substantial regulatory relief for community banks by:

  • Exempting banks with consolidated assets of $1 billion or less from the Sarbanes-Oxley Section 404(b) internal-controls assessment requirement.
  • Requiring the FRB to revise its Small Bank Holding Company Policy Statement by increasing the qualifying consolidated asset threshold from $500 million to $5 billion.
  • Exempting from any escrow requirements any first lien mortgage on the principal dwelling of a consumer held by a lender with $10 billion or less in total assets; and
  • Providing “qualified mortgage” status under the CFPB’s ability-to-repay rules for any mortgage originated and held in portfolio for at least three years by a lender with less than $10 billion in total consolidated assets.

The Alert will follow developments concerning this proposed legislation.