Pub. 15 2018 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S 6 EXECUTIVE VICE PRESIDENT’S MESSAGE JOHN W. ANDERSON, EXECUTIVE VICE PRESIDENT New Mexico Bankers Association Senate On March 14, the U.S. Senate passed the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) by a bipar - tisan 67-31 vote. The measure represents the greatest reduction of financial regulations since the economic crisis a decade ago despite bitter division between Senate Democrats. The bill still must be heard in the House, where some Republicans have been pushing a more ag - gressive rollback of financial regulations. For example, the House passed a bill last year that stripped the CFPB of much of its power. CFPB was not addressed in the Senate bill. Congress - man Jeb Hensarling, Chairman of the House Financial Services Committee, has indicated that his committee may alter the Senate bill to reflect their priorities. But that could drive away the Senate Democrats needed to pass the legislation, so the House will be under pressure to accept the Senate bill with no revisions. The following is a summary of key provisions of S. 2155, which commentators suggest is the first meaningful bipartisan regulatory relief bill to be taken up by the Senate since the enact - ment of the Dodd-Frank Act: Title I. Improving Consumer Access to Mortgage Credit • Designate mortgages held in portfolio as Qualified Mortgages (QM) for banks with less than $10 billion in assets. This would also apply when a mortgage is transferred to a wholly-owned subsidiary where the mortgage loan is considered an asset of the bank for regulatory accounting purposes. • Relief from appraisal requirements for some real estate transactions under $400,000 in rural areas is provided, but to qualify lenders must show that three appraisers were not available within 5 days beyond a reasonable time frame as determined by the bank for an appraisal. • Small volume originators (less than 500 mortgages/500 open-end lines of credit for each of the two preceding years) are exempt from new HDMA disclosures added by the Dodd-Frank Act. • Provides an exception to TILA escrow requirements for banks with less than $10 billion in assets, and that have originated 1000 or fewer loans secured by a first lien on a principal dwelling during the preced - ing calendar year. • Removes 3-day waiting period require - ment in TILA/RESPA mortgage disclo - sures if the consumer asecondofferof cred - it from the same lender with a lower rate. Title II. Regulatory Relief and Pro- tecting Consumer Access to Credit • Simplify capital calculations for com - munity banks with less than $10 billion in assets. Federal banking agencies are required to establish a community bank leverage ratio of tangible equity to aver - age consolidated assets of not less than 8 percent and not more than 10 percent. Banks with less than $10 billion in total Congressional and Legislative Update Relief from appraisal requirements for some real estate transactions under $400,000 in rural areas is provided, but to qualify lenders must show that three appraisers were not available within 5 days beyond a reasonable time frame as determined by the bank for an appraisal.