Senator Kirk Introduces Community-Bank Lending Bill

July 29, 2013

U.S. Senator Mark Kirk (R-IL) joined with fellow Senate Banking Committee members Jerry Moran (R-KS) and John Tester (D-MT) in introducing the Community Lending Enhancement and Regulatory Relief (CLEAR) Act (S. 1349). This legislation would provide much-needed regulatory relief for community banks, enabling them to focus on lending, helping small businesses and communities grow, and creating jobs.

kirk schroeder

David Schroeder, CBAI VP of federal governmental relations, personally  thanked Senator Kirk for introducing this legislation during his recent   quarterly visit to Washington D.C.

Senator Kirk said, “In an era of new regulations that hamper community   banks’ ability to meet the needs of their communities, I am proud to join   Senators Moran and Tester in this bipartisan bill that aims to address        the unique differences between mega global financial institutions and   community banks.”

The CLEAR Act includes four provisions that would:

Exempt community banks with assets of less than $1 billion from the Sarbanes-Oxley 404(b) internal-controls assessment mandates. Community banks’ internal-control systems are monitored continually by bank examiners which should not have to incur the unnecessary expense of paying an outside audit firm for attestation work.

Require the Federal Reserve to revise the Small Bank Holding Company Policy Statement by increasing the qualifying asset threshold from $500 million to $5 billion. The increased threshold would ease capital requirements for small banks.

Exempt community banks with assets of less than $10 billion from escrow requirements for any first mortgage held by the lender. This exemption will help support the still-struggling housing recovery.

Provide “Qualified Mortgage” status under the Consumer Financial Protection Bureau’s ability-to-repay rules for any mortgage held in portfolio for at least three years by community banks with less than $10 billion in assets.

U.S. Congressman Blain Luetkemeyer (R-MO) has already introduced the CLEAR Act (H.R. 1750) in the House which similarly seeks targeted regulatory relief for community banks.