The U.S. Senate passed the 21st Century ROAD to Housing Act this week, a legislative package that seeks to expand housing supply in the United States.
The updated package cuts red tape and removes unnecessary barriers to new home construction, as well as providing needed relief to community banks. Specifically, the text of the legislation includes:
- Nine community banking bills that will provide needed relief to Main Street and expand local lending for housing construction and mortgages.
- 45+ housing provisions to reduce unnecessary regulatory barriers to new home construction and modernize HUD programs.
- Retains the House changes to Section 1001, specifically the removal of the forced seven-year divestiture and protects Build to Rent.
“Today’s bipartisan vote is an important step toward addressing America’s housing affordability crisis and giving families across this country a fair shot at the American Dream. This bill reflects years of work and priorities from the White House, Senate, and House to build a housing affordability package that puts families first, increases supply, expands access to affordable housing, and addresses the housing crisis. This is a strong, bipartisan, bicameral product that can pass both chambers and become law. We will keep working together to get this across the finish line and deliver relief for families across the country,” U.S. Sen. Elizabeth Warren (D-MA), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, and U.S. Sen. Tim Scott (R-SC), chairman of the Committee, said in a joint statement.
The bill seeks to increase the housing supply, which has not kept pace with demand. The shortage has been fueled by several factors including rising construction costs, regulatory delays, and outdated zoning constraints. It also led to struggles for small and medium sized banks that finance new construction loans due to regulatory burdens.
The passage is supported by the Independent Community Bankers of America (ICBA). The amended housing relief bill includes several ICBA-advocated community bank regulatory reforms to promote lending and housing affordability.
“ICBA and the nation’s community banks commend the Senate for passing amended housing legislation and including pro-community bank regulatory reforms,” ICBA President and CEO Rebeca Romero Rainey said. “We thank the members of the Senate and House who have prioritized this bipartisan legislation and worked to ensure the inclusion of ICBA-advocated reforms. We encourage lawmakers to get this critical measure to the president’s desk to be signed into law.”
The Senate legislation includes provisions to:
- Allow community banks to hold custodial deposits and more reciprocal deposits without them being considered brokered deposits, which are subject to restrictions.
- Provide an 18-month exam cycle and other exam relief for banks with up to $6 billion in assets.
- Promote the formation of de novo community banks by streamlining the application process.
- Create a two-year pilot program to promote the creation of de novo banks, especially in rural areas, by providing more regulatory, capital, and lending flexibility.
- Establish a Treasury Financial Agent program enabling partnerships between minority depository institutions, rural community banks, and other financial institutions.
- Require the federal banking agencies to study improving the growth, capital adequacy, and profitability of rural depository institutions.