Iowa Superintendent of Banking and Chairman of the Conference of State Bank Supervisors Thomas B. Gronstal spoke in favor of the Commercial Real Estate Stabilization Act (CRESA) during a House committee hearing Thursday.
The act, H.R.5816, was introduced by Rep. Walter Minnick, D-Idaho, and seeks to create liquidity in the commercial real estate market by offering federal guarantees on credit instruments. Half of the CRESA's guarantee capacity would be reserved for community banks.
‘CRESA's structure contemplates conservative lending by community banks and other institutions with the expertise and experience to engage in successful commercial real estate lending,’ Gronstal said in testimony prepared for the House Financial Services Committee hearing. ‘Additionally, the program's use of a government guarantee to attract and encourage private-market activity increases the likelihood of broader market benefits.’
Gronstal also recommended that state bank regulators be represented on the CRESA program's oversight board, given CRESA's stated focus on smaller institutions and state bank regulators' knowledge of local economies.
‘We commend Congress for re-affirming the dual-banking system in the Dodd-Frank Wall Street Reform and Consumer Protection Act, and we believe Representative Minnick's proposal is also an affirmation of the dual-banking system and the vital role community banks play in our national economy,’ Gronstal said.