House Financial Services Committee Approves Five Bills for U.S. Small Businesses and Community Financial Institutions

The House Financial Services Committee passed five bills with bipartisan support that are intended to provide regulatory relief to smaller businesses and community financial institutions. The five bills primarily relate either to mortgage finance or to easing SEC registration requirements for small issuers.

• H.R. 4167, the Restoring Proven Financing for American Employers Act (53-3) would amend the Bank Holding Company Actto allow banks to invest in collateralized loan obligations ("CLOs") issued before January 31, 2014. The bill also would clarify the definition of ownership interest in a covered fund for purposes of the Volcker Rule.
• H.R. 3623, the Improving Access to Capital for Emerging Growth Companies Act (56-0) would reduce "burdensome" SEC registration and disclosure requirements for Emerging Growth Companies ("EGCs"), a new class of publicly traded companies created by the JOBS Act, to help them access the capital markets more efficiently, streamline the IPO process for them, and deploy their assets to grow and create jobs.
• H.R. 3584, the Capital Access for Small Community Financial Institutions Act of 2013 (55-0), would amend the Federal Home Loan Bank Act to allow privately-insured credit unions to be eligible for membership in the Federal Home Loan Bank ("FHLB") System, as well as allows privately-insured credit unions to access the FHLBs' low-cost secured borrowings, which would provide a new source of mortgage funding for those financial institutions and their members.
• H.R. 2672, the Helping Expand Lending Practices in Rural Communities Act (55-1) would amend Dodd-Frank to create an appeals process for areas to be designated as rural for the purpose of exempting certain loans from the CFPB’s Qualified Mortgage Rule.
• H.R. 4164, the Small Company Disclosure Simplification Act (51-5) would provide a voluntary exemption for all EGCs and other issuers with annual gross revenues under $250 million from the SEC's requirements to file their financial statements in an interactive data format, eXtensible Business Reporting Language ("XBRL"). The bill also would require the SEC to conduct a cost-benefit analysis on the XBRL requirement and report to Congress within one year after enactment, allowing small businesses to focus on expanding and creating jobs.

See: House Financial Services Committee Press Release. Related news: SIFMA Submits Comments in Support of Restoring Proven Financing for American Employers Act (March 13, 2014); House Bill Would Clarify Ownership Interest Definition for CLOs under Volcker Rule (March 7, 2014); Trade Associations Request Further Clarification Regarding Ownership Interests for Debt Securities under New Volcker Rule Regulations (January 7, 2014); Trade Associations Request Clarifications Regarding Holding Debt Securities under New Volcker Rule Regulations (with Lofchie Comment) (December 26, 2013).