Krystyna M. Blakeslee

WASHINGTON, DC–Last month on the day that Speaker of the House Paul Ryan announced he wouldn’t run for re-election and Facebook CEO Mark Zuckerberg was testifying before Congress, a group of representatives from the CRE industry was on the Hill for an entirely different reason: to discuss the fate of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155), which passed in the Senate in March  and which, among other things, reforms HVCRE. Dechert’s finance and real estate partner Krystyna M. Blakeslee, who is also co-chair of the Commercial Real Estate Finance Counsel High Volatility Commercial Real Estate (CREFC-HVCRE) Working Group, was among the industry reps that met with members of the House Financial Services Committee, Senate Banking Committee staff and regulators from the FDIC, OCC and the Fed to discuss HVCRE and High Volatility Acquisition, Development and Construction (HVADC).

The bill is now before the House Financial Services Committee, where it faces a friendly chairman Jeb Hensarling and a long road in adding amendments that will allow the bill to reach the President’s desk this year. Here are Blakeslee’s observations from that day on the Hill and her thoughts on what may happen with the legislation.

Politics Will Play a Role

Politics, not surprisingly, will likely play a big role in this process. “When the Senate passed 2155 it was passed with bipartisan support but the Democratic coalition that supported the bill pretty much made it clear that nothing can change from that version,” Blakeslee tells “The more time that goes by and the closer we get to the election, I think the more entrenched everyone will be to their respective positions.” As for the House, it is insisting on having at a seat at the table in order to put its imprint on the measure. To that end, it is proposing some 30 or so amendments. “I think it is very unlikely 2155 will be passed by the House in its current form,” she says. In her talks with politicians and policy-makers, though, “everyone was very hopeful that some version of 2155 would be passed by the House and there would be a reconciliation process before it got to the President’s desk.”

A Possible Timeline

Blakeslee thinks that a bill will be hammered out right before Congress leaves for its August recess and not before. “The Republicans are going to want another win going into the election season and the President will want one too,” she says. They will want to be able to point to further deregulation to their base, she says.


HVADC stands for High Volatility Acquisition, Development and Construction and in September of 2017 federal regulators proposed replacing HVCRE regulations with HVADC following numerous complaints from small-and-midsized banks that HVCRE’s capital requirements were too onerous. Among other changes, HVADC would apply to loans going forward while HVCRE would apply to earlier loans. This is just in the proposal stage, Blakeslee explains. “According to the people I have spoken with, there is a lot of pushback on HVADC becoming a rule, not the least of which is due to the impossibility of implementing a new regime on top of an old one and trying to run reports so that you can comply with both.”

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Erika Morphy

Erika Morphy has been writing about commercial real estate at for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.

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