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Jeff Makovicka and David Karnes Author Basel III Mortgage Service Assets Article in Nebraska Banker

Publications - Article | July 15, 2015

Kutak Rock attorneys Jeff Makovicka and David Karnes authored an article, “Are the Basel III Mortgage Servicing Assets Requirements Endangering Certain Relationship Lending?” in the May/June 2015 issue of Nebraska Banker.

The article discusses the implementation of Basel III’s punitive capital requirements regarding mortgage servicing assets (MSAs) and how the requirements affect certain relationship lending with a borrower. The article describes specific issues with the Basel III rules within the banking industry, including limiting MSAs to 10% of a bank’s Tier 1 common equity (CET1), lowering regulatory capital ratios, cost, shedding assets, and losing long-standing relationships between banks and customers. Makovicka and Karnes also provide an analysis of how MSAs are penalized under the Basel III rules and discuss Congress’s plans to fix the disruption caused by the MSA Basel III requirements.

Makovicka, a partner in the firm’s Omaha office, counsels public and private companies in connection with regulatory compliance mergers and acquisitions, and corporate governance. His practice concentrates on banking matters and he represents banking and other financial institutions and their boards of directors on the strategic policy and regulatory aspects of mergers and acquisitions, joint ventures, establishing subsidiaries, capital raises, restructuring transactions, and investments by and in banking organizations.

Karnes is an of counsel attorney in the firm’s Washington, D.C. and Omaha offices. He focuses his practice on banking, general corporate law, governmental relations, federal legislative and regulatory law and international law.