Reform and relief for the banking community

This time last year, the Maryland Chamber’s government affairs staff ascended to Capitol Hill to meet with our Congressional Delegation concerning the Dodd-Frank Wall Street Reform and Consumer Protection Act and a potential reform to the 2010 legislation.

As we all know, Dodd-Frank created tens of thousands of pages of new regulations that have been difficult for brands, particularly community banks, to navigate. We went into these one-on-one and stakeholder meetings with targeted recommendations for amending Dodd-Frank and creating meaningful reform in the banking sector.

In working with our federal partners, we suggested the following improvements.

Our Recommendations

Expand the definition of qualified mortgages (QMs) to include, for purposes of safe harbor, certain requirements for residential mortgage loans when they originate from a bank’s portfolio.

Redefine high volatility as it pertains to commercial real estate (CRE) loans and exempt community banks from these requirements.

We believed that these minor changes would provide major relief to those community banks, which are the primary source of loans to small businesses and major engines of economic development.

What Happened

We are happy to report that those recommendations were included in Senate Bill 2155 – Economic Growth, Regulatory Relief, and Consumer Protection Act, which passed both Houses of Congress and was signed into law by the President on May 24.

In reference to our recommendations, the new law will, among other provisions, classify certain mortgage loans that originate and stay in a bank’s portfolio (with less than $10 Billion in total consolidated assets) as a qualified mortgage & exempt certain projects aimed at community development from being classified as high volatility.

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