On May 21, 2013, Treasury Secretary Jack Lew in his role as Chairman of the Financial Stability Oversight Council ("FSOC") testified before the House Financial Services Committee. In its annual report, the FSOC stated that "the commercial real estate sector has improved, with prices rising slightly and CMBS issuance gaining strength in 2012. The past year witnessed the strongest post-crisis credit flows for commercial real estate (CRE), with almost $100 billion in CMBS issuance".

The report further noted that "[t]his amount of issuance represents an increase of approximately 50 percent over the prior year, although these levels are still much lower than pre-crisis amounts. Given the low interest rate environment, investor demand has been quite strong, with non-agency credit spreads for the most senior debt tightening by about 90 basis points in 2012." One area of risk identified in the report is the fact "that over $1.2 trillion in CRE loans will be maturing in 2016 to 2018, compared to less than $1 trillion in 2013 to 2015."

During his testimony, Secretary Lew stated that "this is not the time to be enacting big changes to Dodd-Frank or to the regulatory system. I think we're on a path now, which is the right path, which is to implement Dodd-Frank and to then take stock when we're done implementing Dodd-Frank." The idea that changes are not likely to Dodd-Frank was echoed by Senate Majority Leader Mitch McConnell (R-Ky.) as reported in earlier blog posts. Of course, Senator McConnell's perspective related to the inability to make progress on what he views as significant modifications necessary to Dodd Frank given the current political environment in Washington.