ICBA-supported legislation to prevent federal banking regulators from arbitrarily penalizing community banks for working constructively with borrowers was introduced in the House. The Common Sense Economic Recovery Act of 2011 (H.R. 1723), introduced by House Financial Services Committee member Bill Posey (R-Fla.), would reduce examiner interference in the ability of community banks to make and modify loans to small businesses and mortgage recipients.
The legislation would stop regulators from assigning non-accrual status to performing loans. It would treat loans as performing loans if they are: current, no more than 30 days delinquent in the previous six months, amortizing loans and not funded through an interest reserve account. The bill also directs financial regulators to report to Congress ways to prevent contradictory guidance.
“We’re trying to help homeowners, small-business owners and our local community banks stay afloat,” Posey said. ICBA strongly supports the legislation and will work with lawmakers to continue building support for it in Congress.