Financial Regulation Legislation Passes Senate

The Senate passed the conference report to H.R. 4173, Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill will now go to the President for his signature. The legislation was opposed by the banking industry because it would significantly impact fees banks charge while adding new regulations and oversight over lenders, and create the Consumer Financial Protection Bureau. While this legislation does not directly address the construction industry, small lenders that work with the construction industry were concerned about the treatment of trust preferred securities. The final version allowed banks under $15 billion in assets to keep current trust preferred securities in place while requiring bigger banks to divest these assets over the next five years. Robert A. Murray, McGraw-Hill Construction's vice president for economic affairs, says its short-term impact on construction lending would be "neutral to somewhat negative." He says, "The [bill's] greater emphasis on regulation and the adaptation of the banking industry to this new environment may push back the timing when lending conditions can improve." It will take a while to really understand the impact of the new law on the construction industry (or really any other industry). The bill calls for 399 individual rule makings and 46 studies before it is fully implemented.