Finally! Senate Bill 2155 became the law of the land upon President Trump’s signature on Friday, May 25th . A great way to end a great week as earlier the House brought S.2155 to the floor which passed by a vote of 258-159 including the support of 33 moderate Democrats. This very welcome relief has long been in the making as ICBND and ICBA and their member banks for years have fought for regulation that is tiered to the size, risk, complexity and business model of community banks. This bill represents the first significant “walk back” of Dodd-Frank. It’s a heck of a start, but there’s a whole bunch more regulatory relief needed. You have to like the momentum though!
ICBND sincerely thanks Senator Heitkamp, Senator Hoeven, and Congressman Cramer for their votes in support of this legislation. A special thanks to Senator Heitkamp. When things seemed to be falling apart after Ranking Committee member Brown divorced himself of the bill when went on counterattack, Senator Heitkamp took a lead role in reviving it and rallying support from her Senate colleagues on both sides of the aisle.
So now what? Well, some of the provisions of the bill require agency rulemaking before they go into effect but most of the provisions of the law are technically effective immediately. However, if they conflict with existing regulation, the banking agencies must conform their regulations to the new law. We expect the agencies to act quickly. Rather than bore you to tears here, the details can be found at S.2155 and What It Means To You .
In short, here’s where I see many of the practical benefits for ICBND members:
· Qualified Mortgage status (QM) for home mortgages held in portfolio
· Exemption from TILA escrow requirements for community bank mortgages held in portfolio if the bank originates fewer than 1000 first lien mortgages annually
· Relief from new HMDA data collection and reporting for lenders that originate fewer than 500 mortgages annually
· Creates “short form” call report for use in first and third quarters of each year by well-rated banks with assets of less than $5 billion
· Eases restrictions on reciprocal deposits to keep deposits in the community
· Appraisal requirement exemption in areas with scarcity of licensed appraisers
· Increases eligibility for the 18-month exam cycle
I hope S.2155 is an indication of a wonderful summer to come for all of you!