,i #aacth ,,congress #ast ,session ,h4 ,r4 #abee ,,in ,,the ,,house ,,of ,,representatives ,march #ai1 #bjac ,mr4 ,gary ,g4 ,miller of ,california 7for himself and ,mrs4 ,mc,carthy of ,new ,york7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to enable ,federal and ,state chartered banks and thrifts to meet the credit needs of the ,nation's home builders1 and to provide liquidity and ensure stable credit for meeting the ,nation's need for new homes4 #a4 ,short title ,this ,act may be cited as the ,home ,construction ,lending ,regulatory ,improvement ,act of #bjac4 #b4 ,purpose ,it is the purpose of this ,act to-- 7#a7 immediately provide authority and guidance that ,federal and ,state bank regulators can use to ensure that ,federal and ,state chartered banks and thrifts that provide financing to ,america's home builders are permitted to make loans1 provide ongoing liquidity1 and ensure stable financing to such home builders2 and 7#b7 enable ,federal and ,state chartered banks and thrifts to provide initial and ongoing credit to ,america's home builders to aid in restoring liquidity to the home building sector and to restore vitality to the ,united ,states residential housing market4 #c4 ,coordinated rulemaking 7a7 ,initiation of proceedings ,not later than #ij days after the enactment of this ,act1 the appropriate ,federal banking agencies shall initiate a coordinated rulemaking with respect to financial institutions under their respective jurisdictions that make real estate loans to home builders4 ,such rulemaking shall provide for the following3 7#a7 ,elimination of the #ajj percent of bank capital measurement 7,a7 ,loan origination ,if any qualified financial institution is holding real estate loans in its lending portfolio that in the aggregate represent #ajj percent or more of its total capital1 the appropriate ,federal banking agency shall not prohibit any such institution from continuing to make such loans to home builders4 7,b7 ,lending decisions ,the appropriate ,federal banking agency shall not prevent a qualified financial institution from making a real estate loan to a home builder that has a viable project4 7,c7 ,qualified financial institution defined ,for purposes of this paragraph1 the term qualified financial institution means a financial institution that received1 in the most recent examination of the institution1 a ,,camel composite rating of #a1 #b1 or #c under the ,uniform ,financial ,institutions ,rating ,system4 7#b7 ,realistic market based appraisals 7,a7 ,valuation standard ,the appropriate ,federal banking agency shall require that entities used by financial institutions to assess the value of collateral1 with respect to a real estate loan1 associated with any viable project in such institution's lending portfolio utilize an as completed valuation to make such an assessment4 7,b7 ,arms length transactions ,the appropriate ,federal banking agency shall require that entities used by financial institutions to assess or review underwriting standards and collateral values for real estate loans made by such institutions after the date of the enactment of this ,act use comparable sales involving arms length transactions to make such an assessment or review4 7#c7 ,prohibition on compelling lenders to call or curtail loans in good standing 7,a7 ,home builders in good standing ,the appropriate ,federal banking agency shall not compel a financial institution to call or curtail a real estate loan of a home builder that is in good standing4 7,b7 ,maximum market valuation 7i7 ,in general ,the appropriate ,federal banking agency shall1 in the case that a home builder is in good standing on a real estate loan but the home builder's collateral1 with respect to that loan1 has decreased in value based on an as completed valuation1 permit a financial institution to work with such home builder to realize the maximum current market valuation of such collateral using workout methods or other appropriate means4 7ii7 ,period of workout methods ,workout methods may be utilized up to a #bd-month period following the issuance of final regulations under subsection 7c74 ,in no case shall any real estate loan be required to be charged off until the financial institution holding such loan has worked in good faith to exhaust all workout methods or other appropriate means4 7,c7 ,reclassification of loans ,the appropriate ,federal banking agency shall not require a financial institution to reclassify any real estate loan in this paragraph on such institution's balance sheet1 unless there is a significant reason under ,financial ,accounting ,standards ,board ,accounting ,standards ,codification #caj-aj-ce-ee or #caj-aj-ce-eg4 7#d7 ,waiting period ,if the enactment of paragraphs #b or #c of this subsection helps to improve a financial institution's ,,camel composite rating under the ,uniform ,financial ,institutions ,rating ,system from a #d or #e to a #a1 #b1 or #c in such institution's next examination that begins after the date that final regulations are issued pursuant to subsection 7c71 such institution's improved rating shall take effect no earlier than #bd months after such rating was received4 7b7 ,coordination1 consistency1 and comparability ,each of the agencies with authorities referred to in subsection 7a7 shall consult and coordinate with the other such agencies and authorities for the purpose of assuring1 to the extent possible1 that the regulations by each such agency and authority are consistent and comparable with those prescribed by the other such agencies and authorities4 7c7 ,deadline ,not later than #f months after the enactment of this ,act1 each of the agencies with authorities referred to in subsection 7a7 shall issue final regulations to implement rules issued under this ,act4 7d7 ,agency authority ,the rules issued under this ,act shall be enforced by the appropriate ,federal banking agencies with respect to financial institutions under their respective jurisdictions4 7e7 ,effect on ,state law ,the rules issued under this ,act shall not supercede the law of any ,state except to the extent that such law is inconsistent with such rule1 and then only to the extent of the inconsistency4 #d4 ,definitions ,in this ,act3 7#a7 ,appropriate ,federal banking agency ,the term appropriate ,federal banking agency has the same meaning as is given such term in section #c7q7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7q774 7#b7 ,arms length transaction 7,a7 ,in general ,the term arms length transaction means a negotiated real estate transaction between a buyer and seller in which such buyer and seller act independently of each other4 7,b7 ,transactions excluded ,such term shall not include any transaction involving a short sale or foreclosed property or any other distressed real property4 7#c7 ,as completed valuation ,the term as completed valuation means the estimated market value of collateral after the full completion and absorption of the development and construction associated with the highest and best use of the collateral4 7#d7 ,financial institution ,the term financial institution means an entity regulated by1 and under the supervision of1 any appropriate ,federal banking agency4 7#e7 ,good standing ,the term good standing means making payments on a real estate loan in accordance with the agreement of such loan4 7#f7 ,real estate loan ,the term real estate loan means any indebtness 7secured by a mortgage1 deed of trust1 or other equivalent consensual security interest on real property7 acquired for the purpose of purchasing or improving real property1 including indebtness acquired for-- 7,a7 land acquisition2 7,b7 land development2 and 7,c7 residential construction projects4 7#g7 ,total capital ,the term total capital means the total risk-based capital of a financial institution as reported periodically by such institution in the ,federal ,financial ,institutions ,examination ,council's ,call ,report or ,thrift ,financial ,reports1 as applicable4 7#h7 ,viable project ,the term viable project means a real estate project that a financial institution has determined continues to have a reasonable prospect of reaching completion and sale4 7#i7 ,workout methods ,the term workout methods means techniques to prevent a real estate loan defaulting1 including workout assistance1 loan modifications1 loan write downs1 and flexibility on reappraisal methods4