CRE Finance Council 2016 Government Relations Priorities
The CRE Finance Council has been extremely active the past several years on the legislative, regulatory and accounting fronts. We are engaged first and foremost on issues at the national level, but increasingly, also on the global level. Subsequent to the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, our industry is now adjusting to more than two dozen mandated rules, reports, and studies that directly affect commercial real estate finance. Regulators have now finalized risk retention requirements, Regulation AB II, clarified lease accounting standards, and released several Basel III capital and liquidity rules.
This year, the acrimonious political atmosphere presents a challenge to finding supporters on both side of the aisle willing to partner together for legislative efforts. We believe that little common ground is achievable with the dearth of must-pass legislative items remaining this calendar year. The only remaining must-pass vehicle will be the bill to extend government funding at fiscal year-end (September 30th).
With the onslaught of regulations impacting business strategies and market structure hanging in the balance, CREFC is committed to further strengthening our advocacy efforts in Washington on behalf of our members and working to improve the statutory and regulatory regimes governing our market.
CREFC's top priority is the pursuit of policies that promote transparency and market liquidity, and the organization is actively involved in the following initiatives:
Basel III Risk-Based Capital Treatment of Portfolio Loans and Securitizations
Though the U.S. regulators finalized rules framing Basel III risk-based capital (RBC) treatment in 2013, the regime is complex and the regulatory community continues to roll out more granular methodological requirements under the auspices of The Basel Committee on Banking Supervision (BCBS) and other international groups. CREFC is continuing work begun with other trade and policy associations to in 2014 to address new standards that are being developed related to portfolio loans (CRE mortgages and mezzanine debt), as well as securitizations.
Historically, CREFC has sought to fill the role of educator and facilitator on the subject of GSE reform. Last year, the organization sponsored a debate on the Johnson-Crapo bill, widely considered to be last hope for GSE reform before the 2016 Presidential election. CREFC has repeatedly met with Congressional staff to answer technical questions regarding the impact of their proposals.
Coordination with CREFC-Europe
Starting with the 2009 G-20 summit that placed regulatory reform on their agenda, rising to the status of international trade and monetary policy initiatives, the regulators have sought to align rules across jurisdictions. In turn, the CRE Finance Council sought to join forces with its foreign segments to strengthen responses to regional authorities. In 2014, CREFC contributed to several submissions to the Bank of England and the European Central Bank. In 2015, we coordinated with CREFC-Europe to develop a comment letter to the BCBS and to the International Organization of Securities Commissions regarding further securitization requirements.
Immigrant Investor EB-5 Visa Program
Temporarily extended last year, the EB-5 program, the U.S. Citizenship and Immigration Services agency grants conditional permanent residency documents (green cards) to qualified investors and expires at fiscal year-end (Sept. 30).
The program’s 10,000 annual visas can go to foreigners who invest $1 million ($500,000 in rural or economically depressed areas) and demonstrate after arriving on a non-immigrant basis that they have directly created 10 permanent jobs. In 1992, Congress established a regional center pilot program that allowed and still allows investors to pool resources for business. It is through the regional program that US Citizenship and Immigration Services economists collect data and evaluate indirect job creation when determining if an investor qualifies. The program, to which USCIS allots 3,000 visas annually, was last renewed in 2012 and will expire at the end of 2015 if it is not renewed again. CREFC will be promoting renewal of the program in the 114th Congress.
For additional information on CRE Finance Council’s advocacy efforts, please contact:
Vice President, Government Relations
Vice President, Policy and Industry Analysis