Press Releases

Today, the House Financial Services Committee passed H.R. 4620, the Preserving Access to CRE Capital Act of 2016, introduced by Congressman French Hill (AR-02). During the markup, Congressman Hill stated:

“If the [risk retention rule] is not modified before going into effect, borrowers across the country could experience significant reductions in access to credit, unwarranted increases in borrowing costs, and reduced liquidity, which could impair economic development and job creation in areas that need it most.

“We should be encouraging private capital flows into commercial investment-grade real estate, yet should this rule take effect in its current form, private capital flows will be significantly curtailed, especially when the risk retention rule is combined with other rules under Basel III and Volcker.

“The Commercial Real Estate Finance Counsel 2015 regulatory impact study found that the 10-year GDP effect on the commercial real estate sector could be nearly $1 trillion. CMBS funds properties across the United States, including $6 billion in Arkansas, and is especially important to secondary and tertiary markets where it may be the only financing option.”

More information on H.R. 4620

H.R. 4620 modifies Dodd-Frank’s risk retention requirements for prudently underwritten, low-risk commercial real estate loans. The current Dodd-Frank rules are set to take effect in December 2016.

As one of the largest sources of credit for commercial and multifamily real estate in the United States, the commercial mortgage backed securities (CMBS) market is an important element of the over $3 trillion commercial real estate debt market, especially in smaller markets. CMBS provides financing to retail, office, apartments, industrial, health care, and many other types of commercial real estate.

Related

Watch Rep. Hill’s Statement at the Committee Markup