Bank-Favored Provisions in Housing Bill Face Uncertainty in Senate
The United States House of Representatives recently passed a bipartisan housing bill, known as the Housing for the 21st Century Act, which includes a host of provisions favored by the banking sector. However, the bill’s future in the Senate remains uncertain, even after its overwhelming bipartisan support in the House.
What Does the Bill Entail?
The Housing for the 21st Century Act is primarily designed to boost the housing supply. It streamlines state and local regulations and simplifies access to funding for builders. In addition to these housing-focused measures, the House has also included several community banking provisions in the bill. These include an expanded eligibility for limited-scope examinations for banks with assets under $6 billion, changes to brokered and custodial deposit rules, and a revised least-cost resolution framework. The bill also includes provisions intended to simplify the formation of new banks.
Contrasting Versions of the Bill
The Senate’s version of the housing package, the ROAD to Housing Act, is notably different. Cosponsored by Senators Tim Scott (R-SC) and Elizabeth Warren (D-MA), the top Republican and Democrat on the Senate Banking Committee, respectively, the Senate’s bill does not include the community banking provisions present in the House version. Consequently, these differences will need to be reconciled for either version of the bill to pass.
Opposition to the Community Banking Provisions
Some Democrats, including Senator Elizabeth Warren, have expressed opposition to the inclusion of the community banking provisions in the housing bill. In a statement, Warren said, “House Republicans should not hold housing relief hostage to push forward several bank deregulatory bills that will make our community banks more fragile while harming consumers, small businesses, and economic growth. Americans need relief from the housing crisis now.”
Furthermore, although some Senate Democrats support the community banking policies, they have expressed reluctance to package them with the housing legislation. They believe that addressing the housing shortage requires a broader, comprehensive approach, separate from the banking provisions.
Backing for the Senate’s Version
Senator Catherine Cortez Masto (D-NV) has publicly backed the Senate’s version of the housing package, expressing her desire to see the House pass the ROAD to Housing Act. Cortez Masto is also working to introduce a Senate version of the Community Bank Deposit Access Act, which is part of the House’s housing package.
In conclusion, despite the House’s approval of the Housing for the 21st Century Act, its fate in the Senate is uncertain due to the differences between the two versions and opposition from key Senate Democrats to the inclusion of community banking provisions within the housing bill. Reconciliation of these differences will require negotiation and compromise.
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