Preserving Access to CRE Capital Act of 2016

Bill: 114-hr-4620
Sponsor: Rep. Hill, J. French [R-AR-2]
Introduced: 2016-02-25 in the House
Policy area: Finance and Financial Sector
Subjects: Administrative law and regulatory procedures
Credit and credit markets
Department of the Treasury
Federal Deposit Insurance Corporation (FDIC)
Federal Reserve System
Real estate business
Securities
Securities and Exchange Commission (SEC)

Summary:
action_date: 2016-02-25
text: 

Preserving Access to CRE Capital Act of 2016 

 
This bill amends the Securities Exchange Act of 1934 concerning credit risk retention standards for commercial real estate loans to revise the optional standard that may include retention of the first-loss position by a third-party purchaser that specifically negotiates for the purchase of that first loss position, holds adequate financial resources to back losses, provides due diligence on all individual assets in the pool before issuance of the asset-backed securities, and meets the same standards for risk retention as the federal banking agencies and the Securities and Exchange Commission (SEC) require of the securitizer.
 
The revised specifications for retention of the first-loss position by a third-party purchaser shall mean the permissible risk retention of the first-loss position by a one or two party third-party purchaser, who may hold the retention obligation in either a senior-subordinate structure or 
pari passu
 (where two or more assets, securities, creditors or obligations are equally managed without any display of preference), as long as each party meets the requirements expressed above.
 
The bill exempts from risk retention requirements the securitization of a single commercial real estate loan or a group of cross-collateralized or cross-defaulted commercial real estate loans that represent the obligation of one or more related borrowers secured by commercial properties under direct or indirect common ownership or control.
 
The SEC and the federal banking agencies shall jointly maintain specified regulations which exempt qualified commercial real estate loans from risk retention requirements.

action_date: 2016-05-26
text: 
(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)
 

Preserving Access to CRE Capital Act of 2016 

 
(Sec. 2) This bill amends the Securities Exchange Act of 1934 concerning credit risk retention standards for commercial real estate loans to revise the optional standard that may include retention of the first-loss position by a third-party purchaser that specifically negotiates for the purchase of that first loss position, holds adequate financial resources to back losses, provides due diligence on all individual assets in the pool before issuance of the asset-backed securities, and meets the same standards for risk retention as the federal banking agencies and the Securities and Exchange Commission (SEC) require of the securitizer.
 
The revised specifications for retention of the first-loss position by a third-party purchaser shall mean the permissible risk retention of the first-loss position by a one or two party third-party purchaser, who may hold the retention obligation in either a senior-subordinate structure or 
pari passu
 (where two or more assets, securities, creditors or obligations are equally managed without any display of preference), as long as each party meets the requirements expressed above.
 
The bill exempts from risk retention requirements the securitization of a single commercial real estate loan or a group of cross-collateralized or cross-defaulted commercial real estate loans that represent the obligation of one or more related borrowers secured by commercial properties under direct or indirect common ownership or control.
 
The SEC and the federal banking agencies shall jointly maintain specified regulations which exempt qualified commercial real estate loans from risk retention requirements.


Legislative actions:
action_date: 2016-05-26
text: Placed on the Union Calendar, Calendar No. 463.
action_date: 2016-05-26
text: Reported by the Committee on Financial Services. H. Rept. 114-597.
action_date: 2016-05-26
text: Reported by the Committee on Financial Services. H. Rept. 114-597.
action_date: 2016-05-19
text: Committee on Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investment. Hearings held.
action_date: 2016-03-02
text: Ordered to be Reported by the Yeas and Nays: 39 - 18.
action_date: 2016-03-02
text: Committee Consideration and Mark-up Session Held.
action_date: 2016-02-25
text: Referred to the House Committee on Financial Services.
action_date: 2016-02-25
text: Introduced in House
action_date: 2016-02-25
text: Introduced in House
action_date: 2016-02-24
text: Hearings Held by the Subcommittee on Capital Markets and Government Sponsored Enterprises Prior to Introduction and Referral.