Senators Jones and Cotton Introduce Bipartisan Legislation to Clarify Commercial Lending Rules

Press Release

U.S. Senator Doug Jones (D-Ala.) and Senator Tom Cotton (R-Ark.) today introduced legislation that would clarify commercial real estate lending rules by providing a clear definition for loans requiring larger capital allocations, referred to as high volatility commercial real estate (HVCRE) loans. Ambiguity around HVCRE rules has not only hindered commercial real estate investment, but also created incentives for higher-risk loans.

"I've heard directly from Alabama businesses about how important it is to fix this problem. This bipartisan bill will help them put vacant land to good use, whether it is for new homes or businesses, while also cutting bureaucratic red tape and creating jobs. I am proud to work across the aisle to propose this commonsense legislation," said Senator Jones.

"The confusion surrounding the rules for this kind of loan has held back lending and created a perverse incentive to make even riskier investments. This bill will bring much-needed clarity and, as a result, spur economic growth. I thank Congressmen Pittenger and Scott for their leadership on this important legislation," said Senator Cotton.

Background: Specifically, this legislation would clarify identification of loans with increased risks necessitating higher capital requirements, and provide clear guidance for when such a loan can be moved to a lower risk classification.

Companion legislation introduced by Congressman Robert Pittenger (R-North Carolina) and Congressman David Scott (D-Georgia) passed the House of Representatives on November 7, 2017.

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