H.R. 6644 – the 21st Century ROAD to Housing Act – includes provisions of importance to banks, cleared a final vote on June 23rd, and was originally scheduled for a signing ceremony on June 24th. However, President Trump abruptly cancelled the event and announced that he would refuse to sign the bill unless Congress passed the separate SAVE America Act / H.R. 7296 / S. 3752 – a bill to require documentary proof of citizenship to register to vote and photo ID at the polling place, or a copy of the photo ID to obtain a mail-in ballot.

Despite that pronouncement by the President, the U.S. House presented the bill to him on July 29^th shortly before going on recess. Under Section 7 of the U.S. Constitution, the President generally must return (veto) a bill within ten days (Sundays excepted) after it has been presented to him or else the bill becomes law even without his signature. Absent a veto or a pivot to sign the bill into law, H.R. 6644 will automatically become law at midnight at the end of the day on July 10.

As reported previously, the legislation combines elements of separate housing bills introduced by the Senate Banking Committee and House Financial Services Committee.

• On the topic of community banks and brokered deposits, the bill provides that “custodial deposits” of an insured depository institution would not be considered brokered deposits if the total amount does not exceed 20% of an institution’s total liabilities and the institution has less than $10 billion in assets. The bill also would modify the amount of deposits that are not considered to be brokered deposits under a graduated scale based on an institution’s total liabilities. Specifically:
  • The sum of the following amounts of reciprocal deposits would not be considered to be funds obtained, directly or indirectly, by or through a deposit broker:
    • An amount equal to 50 percent of the portion of the total liabilities of the agent institution that is less than or equal to $1,000,000,000.
    • An amount equal to 40 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $1,000,000,000, but less than or equal to $10,000,000,000.
    • An amount equal to 30 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $10,000,000,000, but less than or equal to $96,333,333,333.
• The consolidated asset threshold would be raised from $3 billion to $6 billion for insured depository institutions to qualify for an 18-month examination cycle.
• Banking regulators would be directed to streamline the de novo application process and study ways to improve the growth of rural depository institutions.
• The Treasury Department would be required to establish a mentor-protégé program pairing large financial institutions (with assets of $50 billion or greater) with small financial institutions (with assets of less than or equal to $2 billion, a minority depository institution, or a rural depository institution), with the goal of enhancing their capacity to serve customers and potentially act as financial agents.
• The federal banking agencies would be directed to create a new two-year phase-in pilot for de novo financial institutions to meet federal capital requirements.

Author: sdbrownlow

Student of Design