,,ii #aacth ,,congress #ast ,session ,s4 #ajjb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #ba1 #bjac ,mr4 ,menendez 7for himself and ,mr4 ,isakson7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to enable ,federal and ,state chartered banks and thrifts to meet the credit needs of home builders in the ,united ,states1 and to provide liquidity and ensure stable credit in order to meet the need for new homes in the ,united ,states4 #a4 ,short title ,this ,act may be cited as the ,home ,building ,lending ,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 financing2 and 7#b7 enable ,federal and ,state chartered banks and thrifts to provide initial and ongoing credit in a sound manner to ,america's home builders to aid in restoring liquidity and vitality to the housing market4 #c4 ,coordinated rulemaking 7a7 ,initiation of proceedings ,not later than #c months after the date of enactment of this ,act1 the appropriate ,federal banking agencies shall each initiate guidance or rulemaking with respect to financial institutions under their respective jurisdictions that make real estate loans to home builders4 ,such guidance or rulemaking shall provide for the following3 7#a7 ,adjustment of the #ajj percent of bank capital measurement 7,a7 ,loan origination ,notwithstanding any other provision of law1 the measurement of construction loans that triggers additional scrutiny of real estate loans in the lending portfolio of any qualified financial institution shall be #abe percent of bank capital4 ,the ,federal banking agencies shall not treat the #abe percent measurement as a hard cap beyond which loans cannot be made1 but shall consider other relevant factors besides the concentration of such loans1 such as whether the financial institution has in place effective risk management practices that are appropriate for the level and nature of the risk of such loans4 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 in good standing that is secured by a viable project1 unless there is a legitimate supervisory or accounting reason to do so4 7#b7 ,prohibition on compelling lenders to call loans in good standing 7,a7 ,home builders in good standing ,the appropriate ,federal banking agency shall not compel a financial institution to call a real estate loan of a home builder that is in good standing4 7,b7 ,workout activities 7i7 ,in general ,in any case in which a home builder is in good standing on a real estate loan1 but the collateral of the home builder with respect to that loan has decreased in value1 based on a projected valuation of a project as completed1 the appropriate ,federal banking agency shall permit a financial institution to engage in workout activities with the home builder to improve the prospects for repayment of principal and interest in a manner that is consistent with safe and sound banking principles and the need for credit for home building4 7ii7 ,period of workout activities ,workout activities authorized under clause 7i7 may be undertaken during the #bd-month period following the date of issuance of final guidance or regulations under subsection 7c74 7iii7 ,effects ,no real estate loan may be required to be charged off during the period established in clause 7ii7 until the appropriate ,federal banking agency has determined that-- 7,i7 the financial institution holding such loan has worked in good faith to consider reasonable workout activities and has adequately provided for any impairment in such loan2 or 7,,ii7 the financial institution has not considered reasonable workout activities in a timely manner4 7,c7 ,reclassification of loans ,the appropriate ,federal banking agency shall not require a financial institution to reclassify any real estate loan to a homebuilder in good standing on the balance sheet of such institution1 unless there is a legitimate supervisory or accounting reason to do so4 7#c7 ,no ,waiting period ,if the provisions of paragraph 7#b7 help to improve the ,,camel composite rating of a financial institution under the ,uniform ,financial ,institutions ,rating ,system from #c1 #d1 or #e to #a or #b in the next occurring examination of the financial institution that begins after the date on which final guidance or regulations are issued pursuant to subsection 7c71 such improved rating shall take effect immediately after the date on which such rating was received4 7b7 ,coordination1 consistency1 and comparability ,each ,federal banking agency shall consult and coordinate with the other ,federal banking agencies for the purpose of assuring1 to the extent possible1 that the guidance or regulations by each of the agencies and authorities are consistent and comparable with those prescribed by the other agencies and authorities4 7c7 ,deadline ,each ,federal banking agency shall issue final guidance or regulations to implement this ,act not later than the earlier of-- 7#a7 #f months after the date of enactment of this ,act2 or 7#b7 #c months after the guidance or regulations are proposed4 7d7 ,agency authority ,the guidance and regulations issued under this ,act shall be enforced by the appropriate ,federal banking agencies4 7e7 ,effect on ,state law ,the guidance and regulations issued under this ,act shall not supersede the law of any ,state1 except to the extent that the ,state law is inconsistent with the guidance and regulations1 and then only to the extent of the inconsistency4 #d4 ,definitions ,in this ,act1 the following definitions shall apply3 7#a7 ,appropriate ,federal banking agency2 federal banking agency ,the terms appropriate ,federal banking agency and ,federal banking agency have the same meanings as in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#b7 ,financial institution ,the term financial institution means an entity regulated by1 and under the supervision of1 any ,federal banking agency4 7#c7 ,good standing ,the term good standing means the borrower has made all payments on a real estate loan and any other extensions of credit to the borrower or any affiliated entities in accordance with the agreements for the loans4 7#d7 ,real estate loan ,the term real estate loan means any indebtedness secured by a mortgage1 deed of trust1 or other equivalent consensual security interest on real property1 for-- 7,a7 land acquisition for residential construction projects2 7,b7 land development for residential construction projects2 or 7,c7 residential construction projects4 7#e7 ,total capital ,the term total capital means the total risk-based capital of a financial institution as reported periodically by the financial institution in the ,call ,report or ,thrift ,financial ,reports of the ,federal ,financial ,institutions ,examination ,council1 as applicable4 7#f7 ,viable project ,the term viable project means a real estate project that continues to have a reasonable prospect of reaching completion and sale within a reasonable timeframe1 and at a market price that provides for the orderly and timely repayment of the real estate loan4 7#g7 ,workout activities ,the term workout activities means techniques to prevent default on a real estate loan1 including a renewal or extension of loan terms1 extension of additional credit1 restructuring1 loan write downs1 or flexibility on using reappraisal methods that still provide credible value conclusions4 7#h7 ,qualified financial institution ,the term qualified financial institution means a financial institution that received1 in the most recent examination of the institution1 a ,,camel composite rating of #a or #b under the ,uniform ,financial ,institutions ,rating ,system4