WASHINGTON, DC–Last week we reported that a source told us the Senatebill to roll back the Dodd-Frank Act's banking regulations mightinclude a clause that would give some relief from the HighVolatility Commercial Real Estate Loans, or HVCRE, rule. Thebipartisan Clarifying Commercial Real Estate Loans — now calledPromoting Construction And Development on MainStreet — did make it into the final bill, whichwas passed by the Senate. It was not completely ideal — it wound upleaving several important aspects up to the regulators, includingthe risk weight that should be applied to higher-risk constructionlending, according to CREFC.

Still, as the Real Estate Roundtable noted, “crucialclarifications to the HVCRE Rule now move forward to the House.” Itwrote:

These reforms to HVCRE loan definitions would provide greaterassurances for performing loan portfolios with low risk, bolstercredit capacity and preserve economically responsible commercialreal estate lending.

However, the House of Representatives has signalled it wants toadd several provisions to the measure that could effectively killthe entire bill. Namely House Financial Services Committee ChairmanJeb Hensarling (R-TX) has said he wants to include broaderrevisions to the bill and plans to attach nearly three dozen billsto the package. This could threaten the support of Senate moderatesfor the measure. CREFC writes:

Even though the nearly three dozen bills that Hensarling wouldlike to attach to S. 2155 enjoy bipartisan support (which nearlyall do), we believe this avalanche of new policy would ultimatelydoom the fate of the year-long effort in this last conferencephase. We expect moderation to win the day and the bill to becomelaw before the August recess.

The Roundtable says that negotiations between House members, andbetween the two chambers, will begin this next week, prior to thetwo-week Easter recess scheduled for the end of the month.