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Portions of "NewsWatch" are reprinted with permission from "NewsWatch Today", a publication of
the Independent Community Bankers of America, and brought to you as a
part of your bank's relationship with the Arkansas Community Bankers
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Rep. Frank
Requests GAO Study of Fair Lending Regs
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House Financial
Services Committee Chairman Barney Frank (D-Mass.), along with 15
members of the committee, sent a letter to the Government Accountability
Office calling for a comprehensive review of federal enforcement
of the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act,
the Fair Housing Act and other related fair-lending laws. The
members expressed concern over potential racial and ethnic lending
disparities and questioned the thoroughness and effectiveness of
federal regulators' oversight and enforcement of fair-lending laws. The
group asked the GAO to study mortgage, small business and unsecured lending.
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Senate Passes
House Stimulus Package
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The Senate voted
84-12 to approve the $15 billion bipartisan package over 10 years to bolster housing
market activity. The Foreclosure Prevention Act of 2008 (S. 2636)
contains a homebuyer tax credit first proposed by ICBA in its
nine-point economic stimulus package. Under the
bill, homeowners who purchase properties in foreclosure would receive a
two-year $7,000 tax credit. The bill also contains tax breaks for
homebuilders and $4 billion in grants for communities to buy and fix up
abandoned homes.
Missing from the final package were efforts ICBA lopposed
that would have allowed bankruptcy judges to reduce the principal on
mortgages to a home's current value and burdensome Truth-in-Lending Act
expansions. The Senate bill would also raise the size limit of
mortgages insured by the Federal Housing Administration, to $550,000,
and includes $6 billion in unrelated tax breaks for renewable energy
producers.
The measure now proceeds to the house, which is working on
its own version of a tax-focused housing rescue plan, where a major
battle is expected. The White House has gone on record opposing the
Senate plan but has not issued an explicit veto threat. Senate Majority
Leader Harry Reid (D-Nev.), acknowledged that changes will be needed
in upcoming talks with the House and the White House. "This
bipartisan housing bill ... is not perfect," said
Reid. "But it is an important step."
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Ways and Means Committee Clears Housing Tax Bill
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The House Ways
and Means Committee clear a bill that would implement various tax
breaks worth about $21 billion to revive the housing market stimulus,
including a first-time homebuyer credit that mirrors a recommendation
in ICBA's nine-point economic stimulus package.
The bill's homebuyer tax credit would work as an interest-free loan up
to $7,500 for a first-time home purchase that would be repaid to the
government over 15 years in equal installments. This week the Senate
cleared a housing market stimulus bill that would offer $7,000 over two
years for the purchase of a home in foreclosure, nearly identical to
ICBA's homebuyer recommendation. Read ICBA Release.
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ICBA Blasts
FCA Lending Expansion Rule
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ICBA issued a
statement highly critical of the Farm Credit Administration's final
regulation that allows Farm Credit System institutions to provide
processing and marketing loans to businesses owned by non-farmers. ICBA
President and CEO Cam Fine in a statement called the controversial
powers-expansion regulation an unfair and unwarranted encroachment of
government-subsidized lending at the expense of private-sector lending
by tax-paying community banks. Specifically the regulation permits
FCS lenders to circumvent requirements that entities borrowing from the
FCS have at least 50 percent farmer ownership.
The FCA rule, issued last week, generated more than 3,000
comment letters that opposing it, Fine pointed out. "As a
government-sponsored enterprise, the FCS has numerous tax and funding
advantages over the private sector," he explained. "Unlike
other GSEs, which work with community banks, the FCS competes directly
against community banks for loans at the retail level, a fact which FCA
glosses over by repeating the misleading rhetoric of the FCS."
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House
Committee Taking Up Housing Tax Bill
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The House Ways
and Means Committee will begin marking up a $21 billion housing market
stimulus tax package today. Like a similar measure advancing in the
Senate, the committee's proposed bill contains homebuyer tax credit
first proposed by ICBA in its nine-point economic stimulus package. As proposed,
the homebuyer tax credit in the House bill works as an interest-free
loan up to $7,500 for a first-time home purchase that would be repaid
to the government over 15 years in equal installments. The proposed
Senate tax credit would offer $7,000 over two years for the purchase of
a home in foreclosure. The bill would also would allow the
Federal Home Loan Banks to provide credit support for tax-exempt bonds,
a provision ICBA supported with 12 other national
associations in a letter to the committee. The House
Financial Services Committee also today begins a two-day hearing on a
large housing and mortgage rescue bill with multiple provisions. Read ICBA Release.
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