Housing bill sails through Senate, cruising toward passage

• Key insight: A bipartisan housing bill aims to open up funds for local housing projects, especially in the manufactured housing space. 
• What’s at stake: The bill also includes a handful of community bank riders, including measures related to regulatory treatment of brokered and custodial deposits. 
• Forward look: The housing bill will now head to the House for a vote Wednesday, where it’s expected to pass the lower chamber handily. 

WASHINGTON — The Senate has passed its housing package by a wide bipartisan margin, 85 to 5. 

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The housing package aims to open up funds for local housing building projects, particularly for manufactured housing, which could see a greater financing availability as a result of the bill. The bill has also served as a vehicle for other legislation, including a ban on large institutional investors purchasing some single family homes and a number of smaller-bore, bipartisan community banking bills. 

Housing legislation has ping-ponged between the Senate and House for months, with the Senate’s initial version including fewer community bank measures and a stronger prohibition on institutional investors than the version that ultimately passed the House. 

The final version, supported by all four corners of bank policy on the Hill — Senate Banking Committee chair and ranking member Tim Scott and Elizabeth Warren, alongside House Financial Services Committee chair and ranking member French Hill and Maxine Waters — emerged last week, featuring a weakened institutional housing ban, and some — but not all — of the community bank provisions that Hill wanted. 

Most importantly for bankers, the package includes a bill that will make it easier for community banks to engage in brokered and custodial deposits. The final bill also includes provisions to raise the asset threshold for banks to qualify for a longer 18-month examination cycle from $3 billion to $6 billion and to make it easier for de novo banks to form.

The package now heads to the House, where lawmakers are expected to easily pass it when it comes up for a vote on Wednesday. After that the bill will go to President Donald Trump’s desk, where he is anticipated to sign. 

A number of Republicans, including Sen. Rand Paul of Kentucky, Rick Scott of Florida and Ron Johnson of Wisconsin, voted against the bill, arguing that the bill fails to institute a permanent ban on the Federal Reserve creating a Central Bank Digital Currency. Some Republican lawmakers also didn’t like the watered-down version of the ban on institutional investors owning single-family homes. 

“Houses should be for people and not for corporations,” said Sen. Tim Scott, one of the main cosponsors of the bill, on the Senate floor on Monday. “We make it easier for people to have access to housing because of the provision that President Trump placed in this legislation. Now, why are there Republicans who disagree with the President on this one?” 

Although the issue has traditionally been a progressive rallying cry, Trump took up the issue during his State of the Union address. The institutional housing ban has been a rare point of agreement between the White House and leading progressive lawmakers, including Sen. Warren.

“No longer will private equity firms come in with an all-cash offer to snap up a house while a family loses out on their dream,” Warren said on the Senate floor. “Today’s vote proves that it is possible to find bipartisan, common ground on legislation that actually helps the American people.”