Commercial Real Estate Credit and Capital will be Issues for Congress

Issues concerning the continued availability of capital and credit for the commercial real estate industry are sure to be prominent areas of legislative activity for the upcoming session of Congress. Last week, the Basel Committee on Banking Supervision – the international body charged with developing worldwide safety and soundness measures for the financial system – announced it would delay finalizing new banking regulatory and capital requirements, stating that more work needed to be done on the standards. NAIOP and its real estate allies have been vocal in raising concerns on the impact of the so-called “Basel III” capital accords on bank lending to commercial real estate.

The Dodd-Frank legislation and the Basel III capital accords have had a cumulatively negative impact on the availability of bank lending to the commercial real estate sector, and the now-delayed “Basel IV” round was expected to impose even tighter restrictions on the financial system. While non-bank actors have moved into markets once serviced by regulated institutions, a strong presence for bank lending to commercial real estate remains a top NAIOP priority. The Trump administration and the upcoming session of Congress have also made it a policy priority to review Dodd-Frank and other financial regulatory measures, and House Financial Services Committee Chairman Jeb Hensarling has long advocated for a review of the Dodd-Frank regulatory framework.


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