CHOICE Act marked up, advanced to full House
H.R. 10 – the Financial CHOICE Act, was recently introduced by Rep. Jeb Hensarling (R-Texas) on April 26, 2017. Hensarling currently serves as chairman of the House Financial Services Committee. The Committee conducted a three-day mark-up that concluded last Thursday, and an amended version was reported to the full House on strictly party-line vote of 34-26. Committee Republicans voted down nearly 20 amendments offered by Committee Democrats
H.R. 10 would repeal significant portions of the Dodd-Frank Act and provide some general regulatory relief for the financial industry, including several specific provisions for community banks, including “tailored” regulation based on an institution’s risk profile and business operating model for community banks and an expansion of the Qualified Mortgage safe harbor for loans originated and retained by the lender (“portfolio lending.”) The CHOICE Act would also repeal the Durbin interchange amendment and the Volcker Rule.
“I wish I could say this bill is on its way to becoming law, but it’s not,” OBA President and CEO Roger Beverage said. “There’s no way this bill advances in the Senate, but there is a very good possibility we can peel off several of its provisions as separate bills and move them forward. It just depends on the key Democrats who are up for re-election in 2018 in states where President Trump won the electoral vote.”
Click here to read a quick summary of the CHOICE Act.
Three Senate Democrats facing a tough re-election campaign in 2018 have joined with two Republicans to introduce S. 1002, which provides some limited relief to banks with less than $10 billion in total assets:
- giving “portfolio” loans (originated and retained mortgage loans) the “safe harbor” of a Qualified Mortgage;
- exempting these banks from the escrow requirements currently in force;
- exempting these banks from the ever-present “Volcker Rule”;
- modifying some of the TILA/RESPA rules dealing with the 3-day waiting period; and
- exempting banks under $1 billion from the Sarbanes-Oxley internal control certification requirements.
Sen. Jerry Moran (R-Kansas) introduced the measure, and was joined by Sen. Thom Tillis (R-S.C.), Sen. Jon Tester (D-Mont.) Sen. Heidi Heitkamp (D-N.D.) and Sen. Joe Manchin (D-W.V.).
“It’s not a ‘whole loaf’ by any means,” OBA President and CEO Roger Beverage said. “But – at least it’s something and should get the ball rolling. We need to build on this idea and convince the Senate that arbitrary thresholds make no sense; what does make sense is basing the decision of whether a regulation applies to a bank on that bank’s business operating model and its risk profile. That’s the same language that’s contained in the CHOICE Act (H.R. 10) and the TAILOR Act (S. 366, H.R. 1116).”
We’ve had a number of inquiries from bankers asking about S. 291 and why we are opposed to this bill. Apparently, some of its principals are calling around and asking bankers to call us to find out why we killed this bill and why we are opposed to it going forward.
The reason is simple: This proposal (dropped at the very last minute, by the way) would give certain kinds of loans (PACE loans) an immediate priority over every other lien that had been previously filed, except for tax liens. That means it would take priority over your bank’s prior perfected mortgage lien, or any other lien on that property you may have.
There are a lot of reasons to oppose this language, but the priority issue alone pretty much takes care of it. Bankers do not support losing their lien priority status on mortgage loans, or any other kind of lien they have properly perfected and that is prior in time to a lien that comes about later in the process.
That’s why we oppose S. 291. Pretty simple.
Mark your calendars for the 2017 OBA Annual Convention & Trade Show, set for May 22-24 at the Embassy Suites in Norman. Keynote speaker Matt Lewis, CNN political commentator and author of the book Too Dumb to Fail: How the GOP Betrayed the Reagan Revolution to Win Elections (and How It Can Reclaim Its Conservative Roots) will discuss the upcoming Trump years in the White House.
Lewis is one of many high-quality speakers that will present. Another inspirational speaker will be Holly Hoffman on May 24. Registration is now open. Click here to view more information.
Convention is looming, as the above story mentions – but don’t forget about other education events! Check out the following:
- Basic Underwriting, May 17, webinar — This class will give an excellent overview of the components of risk an underwriter considers in reviewing a loan.
- Escrow Account Compliance, May 18, webinar — This webinar will cover the latest requirements, guidance, best practices and compliance hot spots.
- Reg DD Common Errors, May 23, webinar — A comprehensive review of Truth In Savings and all the errors that can cause a financial institution to have a UDAAP issue or issues.
- Military Lending Act Essentials, May 24, webinar — This information-packed program helps participants assure they are prepared for the first regulatory review of MLA compliance.
Also, take note of the Bank Trainers Conference 2017, taking place on June 13-15 in San Diego. This conference is a summit for bank and credit union trainers and can help banks come up with new ideas for their training departments. Click here for more information and use referral code OKBA at checkout!
Finally, Promontory Interfinancial Network is hosting a free webinar at 2 p.m. on May 25. This webinar will show attendees how Insured Cash Sweep and CDARS can help provide banks with tools to meet new challenges. Click here for more information!