A qualified buyer will have 120 days from the date of notice to submit an offer, during which time the seller may not accept any outside offers with HPD having discretion to extend timelines. Noncompliance could trigger civil penalties of up to $30,000. 

Each seller must provide to HPD: 

• Building address, the type of sale and estimated sale date, the provision of law, rule, or regulation pursuant to which such action is authorized, if any, and number of dwelling units. 
• The rent roll, a 12-month income and expense statement, the amount of outstanding debt, the two most recent inspection reports conducted by HPD or the New York City Department of Buildings, if any, and any other information HPD may require.

The bottom line: For lenders and capital-markets participants, the slower, less certain transactions and heavier disclosure burdens could weaken liquidity, complicate financing execution, and ultimately pressure valuations in the New York City market. 

What’s next: CREFC is working with its local partners to analyze the proposal and discuss next steps. 

Contact David McCarthy (dmccarthy@crefc.org) with questions or to get involved.

Please contact Sairah Burki at sburki@crefc.org or David McCarthy at dmccarthy@crefc.org with any questions.

Contact Mary Beth Ryan (MRyan@crefc.org) with any questions.

• Mr. James Ryan, Chairman and Chief Executive Officer, Old National Bancorp
• Mrs. Jill Castilla, President and Chief Executive Officer, Citizens Bank of Edmond
• Mr. Chris Furlow, President and Chief Executive Officer, Texas Bankers Association
• Mr. Grover Norquist, Founder and President, Americans for Tax Reform
• Mr. Jarryd E. Anderson, Partner and Co-Chair, Financial Services Group, Paul, Weiss, Rifkind, Wharton & Garrison LLP

What they’re saying: Discussion centered on uninsured transaction balances, depositor behavior in crises, and potential impacts on community, regional, and large banks. 

• The issue of increasing deposit insurance largely fell along party lines, with support from Ranking Member Maxine Waters (D-CA), and disapproval from Chairman French Hill (R-AR). 
• Much of the discussion focused on the Hagerty-Alsobrooks proposal, also known as the Main Street Depositor Protection Act (S. 2999). This bill would:
  • Expand coverage for business operating accounts: If enacted, this bill would raise FDIC/NCUA insurance to $10M per depositor for non-interest-bearing transaction accounts at eligible banks and credit unions. The aim is to reduce run risk and help smaller banks compete with “too-big-to-fail” giants.
  • Cost shielding/structure: A 10-year transition period would prevent community banks with less than $10B in assets from higher assessments or increased premiums tied to the new coverage.
• Many members and witnesses supported a reimagining of the Temporary Liquidity Guarantee Program (TLGP). The temporary FDIC crisis program started in 2008 during the GFC and fully insured non-interest-bearing transaction accounts above the normal limit.
• ETAG: Members discussed creating a new similarly designed program called the Emergency Transaction Account Guarantee (ETAG), as that would let FDIC/NCUA quickly guarantee transaction accounts system-wide during a panic for a limited time. 
  • It was noted that with the speed of electronic transactions, this program would need be deployed at the beginning of a crisis to operate effectively.
  • The ETAG program had bipartisan interest, with many witnesses and members in favor of ETAG reform proposals.
  • Rep. Barr (R-KY) questioned Mr. Furlow as to how ETAG could be preferable to an increase in deposit insurance. Mr. Furlow noted that ETAG would apply to all banks equally and ensure they are safe during a crisis. he notes that it is a reactive measure to a crisis, while increasing deposit insurance is a measure taken beforehand.
• Data collection: Members on both sides of the aisle raised concerns that the FDIC does not collect enough data to monitor uninsured deposits and that a thorough review of the data that is needed will be crucial before reforms can be made.

What they’re saying: Witnesses split into two camps. Bank CEOs and trade groups supported targeted higher coverage for non-interest-bearing business transaction accounts used for payroll and operations.

• Old National’s James Ryan said about 30% of his bank’s deposits are uninsured and argued that $10M coverage for these accounts would protect most mid-sized bank relationships, helping community and regional banks compete against perceived “too-big-to-fail” large banks.
• Skeptics led by Grover Norquist argued coverage is sufficient. According to their testimony, nearly 99% of accounts have under $250K, and the 2023 failures were supervisory and management breakdowns, not insurance shortfalls.
• The skeptics warned that higher guarantees create moral hazard and act like an industry tax passed to consumers.

Deposit Insurance Level Raise: Chairman Hill (R-AR) questioned whether increasing the limit to $10M per depositor is needed noting that 99% of depositors fall under the current $250k limit. He also noted that the failure of Silicon Valley Bank was at its core a management problem. 

What they’re saying: CREFC is a member of the Coalition to Insure Against Terrorism (CIAT), which has worked in previous cycles to reauthorize and reform the program. Over the past few months, CIAT members, the insurance community, and CREFC have been holding meetings to educate Congressional staff and offices about the program and address any potential questions or concerns. 

• Thus far, offices have largely been supportive of the program and a clean, long-term reauthorization. Advocates have pointed to reforms made in 2014 that gradually shift risk from taxpayers to the private sector and allow for recoupment mechanisms in the event of a payout. 
• While TRIA received broad, bipartisan support at a September hearing, there are a number of new members to the House Financial Services Committee and Congress since the program was last reauthorized in 2019, bringing some uncertainty. 
• During CREFC’s Nov. 5 Fly-in, our members spoke about the program with House and Senate offices.

What’s next: The House Financial Services Committee is expected to act on reauthorization legislation in the coming months. While the Senate has not yet held hearings on TRIA this Congress, early House action will set the stage and give the Senate ample time to act ahead of the 2027 EOY deadline.