The Federal Reserve, FDIC and Comptroller of the Currency announced Friday the three agencies have postponed the Jan. 1, 2013 effective date for proposed rules that would force banks to comply with Basel III rules.
In a release, the agencies said the volume of comments received during the comment period and wide range of views expressed, as well as concern by bankers they couldn’t necessary changes in time, influenced the decision. A new effective date was not announced.
“As members of the Basel Committee on Banking Supervision, the U.S. agencies take seriously our internationally agreed timing commitments regarding the implementation of Basel III and are working as expeditiously as possible to complete the rulemaking process. As with any rule, the agencies will take operational and other considerations into account when determining appropriate implementation dates and associated transition periods,” the release said.
David H. Stevens, president/CEO of the Mortgage Bankers Association, called the announcement “a positive development” and said he hopes it signals regulators are going back to the drawing board for a new proposed rule. He said residential, commercial and multifamily real estate borrowers, investors and lenders would be hit with tighter credit and higher costs should the proposed rule be finalized.
“It is critical now that regulators re-propose Basel implementation rules that more appropriately allocate risk-weights on real estate-related assets, whether they are residential, commercial or multifamily loans and securities and/or servicing rights. Otherwise, credit for real estate transactions will tighten and consumer and borrower costs will go up, as banks reduce their real estate lending and mortgage servicing business,” he said.
The announcement that postpones Basel III rules follows an announcement by the Senate Banking Committee that it will hold an oversight hearing on the proposed rule Nov. 14.