ICBA expressed concerns with a proposed rule to limit the scope of the one-to-four-family loan exclusion contained in the agencies’ regulatory capital rules surrounding high-volatility commercial real estate exposures. The proposal would effectively raise regulatory capital requirements for community bank lenders.
ICBA noted that this defies congressional intent under the S. 2155 regulatory relief law, which specifically prohibits assigning a heightened risk weight to HVCRE exposures that primarily finance the acquisition, development, or construction of one-to-four family residential properties.
Assessing higher capital requirements on community banks for otherwise sensible single-family residential development loans penalizes responsible lending, raises the cost of homeownership, and kills construction jobs in rural and underserved communities, ICBA wrote.
Read ICBA's Comment Letter