The “Preserving Access to CRE Capital Act of 2016” (the “Act”), sponsored by Representative French Hill (R-AR), was reported favorably to the House of Representatives on March 2, 2016 by the House Committee on Financial Services by a bi-partisan vote of 39-18. The Act would modify certain aspects of Section 15G of the Securities Exchange Act of 1934 (“Section 15G”)2 as it relates to commercial mortgage-backed securities (“CMBS”) transactions. Specifically, if passed into law, the Act would modify the credit risk retention rules applicable to CMBS transactions in three important ways:

- exempting single asset/single borrower securitization transactions from the requirements of the credit risk retention rules;

- allowing up to two third-party purchasers of an eligible horizontal residual interest to hold such interest in a senior/subordinate structure; and

- modifying the criteria for the qualifying commercial real estate loan exemption to allow more commercial real estate loans to qualify under such exemption.