House, Senate pass housing bill with community bank provisions

The Senate passed a housing bill with multiple regulatory reforms for community banks on June 22. The House of Representatives approved the legislation the following day, sending the legislation to President Donald Trump to sign. Trump has put off signing the bill until Congress approves legislation requiring proof of citizenship for all voters..The 21st Century ROAD to Housing Act, which passed the Senate on an 85-5 vote, would offer an 18-month examination cycle for banks with up to $6 billion in assets. The bill would allow community banks to have more custodial deposits and reciprocal deposits without them being classified as brokered deposits.The legislation streamlines the application process to spark de novo community bank formation and would establish a two-year pilot program to promote the formation of new banks, particularly in rural areas, by offering more flexibility in regulations, capital and lending.The 21st Century ROAD to Housing Act has shuffled between the House and Senate since the House passed the initial version in February, with the Senate passing its own, amended version in March. The House then approved an amended bill last month. Other community bank provisions in the Senate bill include:Forming a Treasury Financial Agent program to spark partnerships between minority depository institutions, rural community banks and other financial institutions. Require federal banking agencies to review improving the profitability, capital adequacy and growth of rural banks.Prevent the Federal Reserve from issuing a central bank digital currency through 2030. The broader bill would also ban large institutional investors from acquiring single-family homes, a provision Trump supports. Senate Banking Committee Chair Tim Scott (R-S.C.) called the legislation the most significant housing bill in decades, while Ranking Member Elizabeth Warren (D-Mass.) also supported the legislation. House Financial Services Committee Chair French Hill (R-Ark.) and Ranking Member Maxine Waters (D-Calif.) credited the Senate for passing the bill. “This bicameral product reflects meaningful House equities — including community banking provisions, protections against institutional investors crowding families out of the housing market, and updates HUD’s HOME Investment Partnership Program,” Hill said. “I look forward to the House moving quickly to advance this bill to President Trump’s desk.”