By Rose Oswald Poels, WBA president and CEO
The Senate and House advanced the 21st Century ROAD to Housing Act yesterday — a comprehensive, bipartisan housing package that seeks to address the housing supply shortage and affordability challenges across the country. The legislation advanced to the President for his signature. However, President Trump canceled the signing late yesterday stating in a social media post that he would not sign the legislation until Congress passed the strict voter ID law, the SAVE America Act.
This is promising news: WBA has long-advocated for policies that expand access to housing while safeguarding the ability of banks to serve as lenders in their communities. These priorities were among the issues Wisconsin bankers discussed during our recent congressional visits in Washington, D.C. I was pleased to see several provisions included in this legislation that align with WBA priorities.
The bill would increase Public Welfare Investment limits for institutions regulated by the OCC and Federal Reserve, which would allow banks to invest more into affordable housing, financial literacy programs, and community development. The legislation includes targeted regulatory and examination relief with an 18-month exam cycle for smaller institutions with up to $6 billion in assets, supports the creation of new banks, and outlines measures that encourage collaboration between larger and smaller financial institutions. The bill also exempts custodial deposits from being considered brokered deposits for certain well-capitalized insured depository institutions and increases the amount of reciprocal deposits that are exempt from the restrictions on brokered deposits.
Bankers know that housing affordability remains an everyday challenge for many of their customers. At WBA’s Economic Forecast Luncheon two months ago, bankers heard from housing economist Robert Dietz that housing costs continue to account for more than half of consumer inflation, and that the nation’s housing shortage is furthermore driven by labor shortages and regulatory costs. Banks are an essential part of the solution because they finance homeownership and local housing development. WBA advocates for policies that encourage increased housing supply while preserving the ability of banks to serve their own markets.
WBA will continue to monitor its progress and I will keep membership informed of any developments that may impact Wisconsin banks.
