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The Common Sense Economic Recovery Act (H.R. 1723)

Congressman Posey is the lead sponsor of bipartisan legislation to aid job creation and economic recovery by preventing federal bank regulators from arbitrarily penalizing small community banks for working with borrowers to modify their loans or accepting mortgage payments from someone other than the borrower. Since the 2008 financial crisis, federal bank regulators have been unnecessarily obstructing the ability of community banks to make and modify loans to small businesses and mortgage recipients.

The Common Sense Economic Recovery Act would stop regulators from assigning performing loans to non-accrual status, which can impair a community bank’s financial health and choke their ability to lend, and lead them to foreclose on borrowers. The legislation would treat any loan as a performing loan if it is 1) current, 2) no more than 30 days delinquent in last 6 months, 3) an amortizing loan, and 4) not funded through an interest reserve account. The bill also directs regulators to report to Congress ways to prevent contradictory guidance from the financial regulators. The bill would sunset two years after enactment. 

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