The Community Lending Enhancement and Regulatory (Clear) Relief Act, H.R. 2133, has gained support from multiple trade organizations since Rep. Blaine Luetkemeyer (R-Mo.) introduced it with the purpose of providing targeted regulatory relief for local financial institutions.
“The bottom line is that the Obama-era regulatory environment has stifled growth and hurt local communities,” Luetkemeyer said in a statement. “That is why I am reintroducing this legislation to allow community banks and credit unions to get back to the business of serving their customers. This legislation will help community financial institutions foster economic growth and build a stronger America. The pendulum has swung too far and it’s time to return to a common-sense, responsible approach to financial regulation that protects consumers from harm without jeopardizing access to the financial products they need to grow their businesses, invest in their communities, and provide for their families.”
Among its provisions, the bill proposes to:
- Limit supervision and enforcement from the Consumer Financial Protection Bureau (CFPB) to institutions with more than $50 billion in assets;
- Remove “abusive” from the CFPB prohibition against “unfair, deceptive, or abusive acts and practices” (UDAAP);
- Increase the “small servicer” exemption threshold to 30,000 annual mortgages;
- Exempt community bank portfolio loans from new Qualified Mortgage and escrow regulations;
- Exempt higher-risk mortgages of $250,000 or less from appraisal requirements for loans held in portfolio for at least three years;
- Raise the Small Bank Holding Company Policy Statement asset threshold from $1 billion to $10 billion;
- Reform capital requirements for mortgage-servicing assets of non-systemic banking institutions;
- Expand community bank exemptions from certain Home Mortgage Disclosure Act reporting requirements;
- Eliminate certain mandates on small-business data collection;
- Amend policies of the Equal Credit Opportunity Act and Fair Housing Act to prohibit “disparate impact” claims and require discriminatory intent; and
- Restrict regulators from ordering deposit accounts to be closed without a material reason.
The Independent Community Bankers of America (ICBA), National Association of Federally-Insured Credit Unions (NAFCU) and Credit Union National Association (CUNA) are among the organizations that have expressed support for the bill.
ICBA pointed out in a statement that the bill includes multiple provisions proposed in ICBA’s “Plan for Prosperity” regulatory relief platform, including some calling for smaller financial institutions to be exempt from regulations intended for the large institutions.
“The Clear Relief Act would help relieve community banks of many crushing regulatory burdens that hinder access to credit, allowing community banks flexibility to meet borrower needs and freeing up resources they can use to make loans and create jobs,” ICBA President and CEO Camden R. Fine said in a statement. “ICBA thanks Rep. Luetkemeyer and strongly urges Congress to advance this bipartisan legislation to enhance economic and job growth at the local level.”
ICBA also expressed support for the Senate version of the Clear Act, introduced by Sen. Jerry Moran (R-Kan.). The association recognized the bill’s original composers: Senate Banking Committee members Heidi Heitkamp (D-N.D.), Jon Tester (D-Mont.) and Thom Tillis (R-N.C.). Fine thanked Moran for introducing the legislation in a separate statement from the one acknowledging the House version.
CUNA President and CEO Jim Nussle cited the bill’s provisions that would exempt smaller financial institutions from certain mortgage lending requirements as a major reason for supporting it.
“We believe your legislation is a good first step toward regulatory relief for credit unions and other community-based financial institutions,” Nussle said in a statement. “There is no question that if the legislation was enacted, credit unions would realize a meaningful reduction in their regulatory burden.”
NAFCU President and CEO Dan Berger also praised the bill, as well as Luetkemeyer, who serves as chairman of the House subcommittee on financial institutions and consumer credit.
“This bill would be an important step toward a more positive regulatory environment for the industry,” Berger said in a statement. “We appreciate Chairman Luetkemeyer’s leadership in advancing this legislation and look forward to working with him and his staff to create more regulatory relief for credit unions.”