PA Congressmen Pitts & Thompson support...

PA Congressmen Pitts & Thompson support Bill Addressing Exam Environment

PA Congressmen Pitts (PA-16) and Thompson (PA-5) cosponsored legislation sponsored by Rep. Bill Posey (R-Fla.) to prevent federal banking regulators from arbitrarily penalizing community banks for working constructively with borrowers. The Common Sense Economic Recovery Act of 2011 (H.R. 1723) would stop regulators from assigning non-accrual status to performing loans.

In a letter to Posey, ICBA President and CEO Cam Fine wrote that the bill will go a long way toward creating rational and consistent loan classifications, which will strengthening bank balance sheets and improve the oppressive examination environment.

H.R. 1723 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 requires the Financial Stability Oversight Council to conduct a study of how to prevent contradictory guidance on loan classifications and capital requirements from the federal banking agencies.