CRE Finance Pros Weigh In on HVCRE Reform

Last week, the Senate passed the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155). Primarily, the bill aims to ensure consumer protections and adequate access to mortgage credit. Specific to the commercial and multifamily real estate sectors, it takes another big step forward in clarifying the widely criticized High Volatility Commercial Real Estate (HVCRE) rule that was first introduced as part of Basel III regulations. Broadly speaking, the bipartisan bill reduced the burden on smaller lenders from some of the toughest requirements of the Dodd-Frank Act, such as the Volcker Rule. There has been a recognition that some of the provisions in the Dodd-Frank-era reforms were applied perhaps too broadly and the net caught too many small fish, says Martin Schuh, senior director and head of government relations at the CRE Finance Council. This bill aims to remedy that problem and alleviate some of the regulatory burden, he adds.