TRIA Passes the House with Dodd-Frank Exemption; Will it Pass the Senate? Your Help is Needed!

Though the U.S. House of Representatives passed the extension of the Terrorism Risk Insurance Act through 2020 by a vote of 417-7 on Wednesday, Dec. 10, its inclusion of a measure opponents say dilutes Dodd-Frank Act protections makes its passage less than certain in the Senate.  

As passed by the House, the legislation now raised the "backstop" for insurer reimbursements from $100 to $200 million, part of a compromise hammered out earlier by New York Senator Charles Schumer (Democrat) and Texas Representative Jeb Hensarling (Republican). It also will gradually increase companies’ co-payments from 15 to 20 percent and the "threshold" for government involvement.

But the sticking point is a measure — now being touted as the derivatives amendment in the press — that includes a change to the Dodd-Frank Act, which was designed to protect the economy from the practices some believe led to the Great Recession. Senate opponents began lobbying Wednesday evening against that amendment, as it essentially allows non-financial institutions, such as hedge funds, to be exempt from the same regulations as the major banks.

BOMA International issued its statement on Thursday morning, Dec. 11, calling on members to urge their Senators to pass the measure and saying without such passage, TRIA will expire "... and leave the commercial real estate industry vulnerable to devastating losses, and jeopardizing investment and other opportunities for growth. The commercial real estate industry simply cannot afford the uncertainty that the expiration ... would create." BOMA International asked that all members contact their senators today and urge them to vote YES on this bill, stating it will cause premium rates to rise dramatically and "many commercial properties throughout the United States will lose significant value."

Also on Thursday, Dec. 11, the Obama administration released a statement opposing inclusion of the derivatives amendment, saying the measure "should not be used as a vehicle to add entirely unrelated financial regulatory provisions."