2019 Legislation Impact on Your Business
by Ryan Gilliland, Government Relations Officer

Not surprisingly, work in Washington tends to run in the context of election cycles. The 2020 race will have a universal chilling effect on active legislation in 2020. In the case of the Senate, even a “quick” impeachment trial is likely to consume significant floor time. More succinctly, consider that 2020 Congressional schedules indicate Congress will be in session only 29 days in the final five months of 2020.

Compounding these dynamics, the daily drumbeat of partisan pugilists has a way of lulling us into complacency. News cycles are increasingly driven by click rates and intellectual junk food—and make no mistake, people eat the stuff, or they wouldn’t keep selling it! However, it’s important to recognize that in the background there’s still critical decisions being made on a daily basis. In the absence of Congressional action, or at the direction of Congress, regulatory agencies are extraordinarily active.

We shouldn’t sell Congress short, either. They’ve still got the checkbook, and regulators still want to stay out of congressional crosshairs. That’s why it’s important to stay dialed in, even if it means digging a little deeper to keep an eye on what’s being issued or under consideration at the regulatory agencies.  

The back half of 2019 was particularly busy, as the full shape of last year’s landmark legislation, The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (S. 2155), comes into focus. Agencies are issuing or have issued significant guidance on the Community Bank Leverage Ratio (CBLR), Current Expected Credit Loss (CECL) standards, Community Reinvestment Act (CRA), brokered deposit rules, and Industrial Loan Charter (ILC) applications among many others.

Additionally, the Treasury has rolled out a proposed set of guidelines to significantly reform the housing finance landscape. Fannie Mae and Freddie Mac will be a point of emphasis for both the Treasury and the Federal Housing Finance Agency (FHFA) in 2020. Those agencies worked out an agreement in September to allow both Fannie and Freddie to begin re-capitalizing for the first time since they were placed in conservatorship during the housing crisis. As part of the broader housing reform plan, the Treasury also recommended that Congress investigate membership rules for the Federal Home Loan Banks—and the FHFA has signaled it will release a Request for Input (RFI) early in 2020 to learn more about FHLBank membership.

In aggregate, as fashionable as the idea of a “do nothing” era might seem on the surface, the reality is it’s an important time to dig in. You might be surprised what you find. For instance, just a few weeks ago the Federal Reserve released a comprehensive report on rural lending based on listening session across the country. That kind of resource is useful in helping validate the things we all anecdotally observe, and help tell the story of why community lending is so critical.

We’re proud to be your partners in that work, and hope you’ll continue to let us know how we can help you to ensure our policy landscape benefits our cooperative partnership with you.

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