HBA

 

Washington Updates

 

Washington Update 2/3/12

 

House Panel Holds Hearing on Bill to Boost Lending

The House Financial Institutions and Consumer Credit Subcommittee on Jan. 31 held a hearing on H.R. 3461, the Financial Institutions Examination Fairness and Reform Act, legislation designed to allow financial institutions to spur lending to small businesses.

Introduced by Subcommittee Chairman Shelley Moore Capito (R-W.Va.) and Ranking Member Carolyn Maloney (D-N.Y.), the bill would give banks the right to appeal regulators’ decisions to a third party.

For the past year, NAHB has been championing legislation sponsored by Reps. Gary Miller (R-Calif.) and Brad Miller (D-N.C.) designed to address the severe credit crunch for acquisition, development and construction financing. H.R. 1755, the Home Construction Lending Regulatory Improvement Act, would address specific regulatory obstacles to the credit needs of the nation’s home builders. The bill currently has 87 cosponsors.

In a veiled reference to H.R. 1755, Capito noted that over the past year her subcommittee has “heard a growing chorus of concern about fairness in the federal examination process.”

During the hearing, lawmakers also cited specific regulatory requirements and bank examiner issues that are harming the housing and economic recovery.

The crux of the credit crisis lies in the disconnect between regulators in Washington and bank examiners in the field. Overzealous examiners in the field are inhibiting the ability of banks to lend at the same time that guidance is coming from Washington to regulators to lend more.

NAHB has been working with Congress to end this impasse and the Capito bill offers another opportunity to resolve this issue.

While NAHB will continue to strongly advocate for H.R. 1755, the association sees an opportunity to advance its long-standing goal to restore the flow of credit to housing and the small business community by working on a dual track to move H.R. 3461 through the legislative process and will seek to incorporate key elements of H.R. 1755 into this legislative vehicle.

Of note to home builders, H.R. 3461 provides new standards for examinations that:

Prohibit a commercial loan from being placed in nonaccrual status solely because the collateral has deteriorated in value
Would not require a new appraisal on a commercial loan unless new funds are being advanced

 

NAHB Urges Quick Congressional Action on 45L and 25C Tax Extenders

NAHB this week called on Congress to move swiftly to restore the New Energy Efficient Home Tax Credit (45L), the only federal incentive available for efficiency in new home construction, and the Existing Home Retrofit Tax Credit (25C), which provides consumers a tax credit of up to $500 for the purchase of qualifying energy-efficient products.

Both tax credits expired at the end of 2011. They are traditionally renewed by Congress at the end of each year as part of a package of expiring tax credits. Commonly referred to as “tax extenders,” this package has become much more difficult to pass due to the government’s fiscal belt-tightening.

The Senate Finance Subcommittee on Energy, Natural Resources and Infrastructure held a Jan. 31 hearing to examine long-term solutions to tax reform and extenders issues.

NAHB weighed in forcefully on this matter in written testimony submitted to the panel.

“While Congress has allowed the incentives to lapse before and has extended them retroactively, for consumers and businesses this uncertainty is extremely disruptive,” NAHB said. “Middle class taxpayers, who are the primary beneficiaries for energy tax incentives, are particularly unlikely to purchase a more expensive, energy efficient product on the expectation that Congress will extend a tax credit retroactively.”

IRS data for tax year 2009 indicates that 25C was heavily used by middle class home owners. Two-thirds of taxpayers who claimed the credit earned less than $100,000 and these households tend to be very price sensitive.

“25C arguably tipped the scales in favor of energy efficiency equipment,” the NAHB statement said. “Middle class home owners undergoing window replacement today are less likely to install energy efficient windows based on a hope and prayer that Congress will retroactively extend the 25C tax credit later this year.”

Remodelers often leverage 25C tax incentives when working with clients. NAHB estimates that the remodeling activity generated by this tax credit in 2009 was associated with more than 278,000 full-time jobs.

Meanwhile, builders who normally utilize the 45L tax credit are faced with the difficult decision of whether to continue to offer the benefit of this credit to their customers without knowing if it will be extended. This decision is even more difficult due to the ongoing housing downturn and extremely tight margins that most builders currently operate on.

NAHB is continuing to urge lawmakers to extend these tax credits in a timely fashion.

“Congress should not be placing businesses and consumers in the position of guessing the direction of tax policy,” NAHB said. “Congress has an obligation to create a degree of tax certainty rather than the current situation that leaves businesses to predict the future.”

 

VAWA Bill Addresses Housing Concerns

The Senate Judiciary Committee on Feb. 2 approved reauthorization of S. 1925, the Violence Against Women (VAWA) Reauthorization Act of 2011. The legislation was first enacted in 1994 and subsequently reauthorized by President Clinton in 2000 and President Bush in 2005.

NAHB supports the goals of the measure, which is designed to improve criminal justice and community-based responses to domestic violence, dating violence, sexual assault and stalking.

Prior to committee approval, NAHB joined with other industry groups to urge lawmakers to support an amendment to improve the current housing provisions in the bill. The amendment subsequently passed and will ensure that VAWA balances the needs of victims, the community and housing providers alike.

 

 
 
 
 
 
 

MISSION STATEMENT: The Home Builders Association of Greater Siouxland promotes the professionalism of the building industry through educational programs and activities for the membership and the communities we serve. We strive to be proactive leaders and recognized as the voice of the building industry