About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

B-331717 1 (2020-01-03)

handle is hein.gao/gaobaeamm0001 and id is 1 raw text is: c rAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 B-331717 January 3, 2020 The Honorable Mike Crapo Chairman The Honorable Sherrod Brown Ranking Member Committee on Banking, Housing, and Urban Affairs United States Senate The Honorable Maxine Waters Chairwoman The Honorable Patrick McHenry Ranking Member Committee on Financial Services House of Representatives Subject: Department of the Treasury, Office of the Comptroller of the Currency; Federal Reserve System; Federal Deposit Insurance Corporation: Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures Pursuant to section 801 (a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of the Treasury, Office of the Comptroller of the Currency (OCC); Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) entitled Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures (RINs: 1557-AE48, 7100-AF15, 3064-AE90). We received the rule on December 20, 2019. It was published in the Federal Register as a final rule on December 13, 2019. 84 Fed. Reg. 68019. The effective date of the rule is April 1, 2020. The final rule revises the definition of high volatility commercial real estate (HVCRE) exposure in the regulations governing regulatory capital. This final rule conforms this definition to the statutory definition of high volatility commercial real estate acquisition, development, or construction (HVCRE ADC) loan, in accordance with section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Pub. L. No. 115-174, 132 Stat. 1296 (2018). The final rule also clarifies the capital treatment for loans that finance the development of land under the revised HVCRE definition. According to the agencies, the new definition differs from the previous definition in two significant ways. First, the previous definition applied to loans that financed real estate acquisition development, or construction, whereas the new definition provides that it only applies to loans that primarily finance these activities and that are secured by land or improved real estate. Second, while both definitions exclude financing for projects where the borrower has contributed 15 percent equity, the previous definition limited the value of borrower contributed land that could be counted as an equity contribution. Previously, only the cash paid for the contributed land could be counted. In contrast, under the revised definition, according to the agencies, the full appraised value of a borrower's contributed land will be counted.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most