WASHINGTON, DC-A new bill introduced by US Reps. Ed Perlmutterand Mike Coffman might, if it is passed into law, alleviate some ofthe pressure small banks are experiencing with lending tocommercial real estate projects. The bill, HR 5249, Capital Accessfor Main Street (CAMS), will temporarily allow small banks withunder $10 billion in assets to amortize their losses on commercialreal estate over a seven-year period.

Small banks have been decrying what they say has been astepped-up campaign by regulators to clamp down on all commercialreal estate lending--no matter how safe the transaction’sfundamentals or how well the bank is familiar with the borrower’sbusiness and balance sheet. Regulators, for their part, have beentaken to task for falling asleep at the wheel on this matter andare loathe to repeat the same mistakes.

This bill would also address, to a certain degree, some of thedebt that is coming due in the next few years that will be unlikelyto find refinancing. Small banks have not been able to deploy theso-called ‘extend and pretend’ policies of larger banks andinstead, under current rules, have to write down this debtimmediately.