As the holidays approach and Congress prepares to wrap up the remainder of its lame-duck session, community bankers can be proud of their advocacy efforts and take stock of an active year in Washington and what it means for our industry.
Due to the stellar reputation of the nation’s community banks and the tenacity and influence of ICBA and our affiliated state and regional associations, we have made significant progress in Washington in the face of seemingly overwhelming regulatory challenges. While there are still opportunities to advance much-needed regulatory and tax relief before the 113th Congress adjourns, 2014 has already proven to be a successful year for community banks.
Most recently, ICBA and community banks scored a tangible victory when the Intercontinental Exchange (ICE) announced it would waive Libor fees for more than 99 percent of the nation’s community banks, saving them as much as $100 million each year. ICE originally announced that any financial institution using or referencing Libor in any financial products would be subject to a $16,000 annual fee. Following frequent and lengthy communications from ICBA, all banks under $1.5 billion are now completely exempt from the fees. Further, more than 300 banks between $1.5 and $10 billion in assets will pay nearly 90 percent less than originally proposed.
ICBA’s multifaceted campaign for community bank regulatory relief made headway on many fronts in 2014. ICBA’s Plan for Prosperity legislative platform saw great success, with the House passing small bank holding company and Consumer Financial Protection Bureau reforms, privacy-notice modernization on the cusp of final passage, and the House Financial Services Committee approving several bills to provide relief from new mortgage rules. Meanwhile, ICBA delivered to regulators nearly 15,000 signatures seeking call report relief, achieved privacy-notice reform at the CFPB, and continued to garner support for tiered regulation at the banking agencies. With 23 Plan for Prosperity bills either introduced or passed out of one house of Congress, we are well-positioned for real relief when the new Congress comes to town in January.
Following an onslaught of data breaches at major retailers such as Target and Home Depot, ICBA sounded the horn and successfully raised awareness of the effect of data breaches on community banks and the need for stricter rules on retailers. ICBA has pushed back against inaccurate and misleading retailer claims, worked with financial industry partners in support of better retailer data protection, and developed community bank resources on data security.
Credit Unions and Farm Credit System
In ICBA’s push for more sound community bank policies, we have also worked for fairer regulations on our industry’s government-sponsored competitors: credit unions and the Farm Credit System. ICBA continues calling on the Farm Credit Administration to halt its relentless drive for expanded FCS financial powers. Meanwhile, persistent ICBA advocacy has virtually ground the credit union push for greater lending and supplemental-capital authority to a halt.
Of course, there is much more to cover. ICBA and the nation’s community bankers also:
• were instrumental in the passage of an ICBA-advocated farm bill that strengthens crop and revenue insurance and removes term limits on guaranteed operating loans,
• helped advance bipartisan legislation to protect homeowners from significant increases in flood insurance premiums,
• led the push to ensure community bank representation on the Federal Reserve Board,
• were responsible for regulators’ modified version of the Volcker rule that removes the drastic impact on collateralized debt obligations backed by community bank trust-preferred securities,
• achieved legislative and court victories in opposition to the “disparate impact” theory in fair lending,
• raised a red flag on an accounting proposal that would require community banks to revise how they account for loan-loss reserves, loans and securities,
• continued to protect community banks from excessive overdraft regulation,
• supported a “single point of entry” strategy for resolving systemically important financial institutions and urged a higher SIFI asset threshold,
• met with White House and congressional officials to advance new protections against abusive patent litigation,
• strongly opposed a ridiculous proposal to allow the U.S. Postal Service to offer financial services,
• repeatedly called on the agencies to suspend Operation Choke Point and supported legislation to rein in the initiative,
• urged reasonable guidance from the FDIC that effectively clarifies policies to ease excessive requirements for de novo bank formation, and
• continued working with policymakers on ongoing efforts to advance housing-finance reform.
I could go on and on. Obviously, it’s been a busy year—and community banks have much to show for it. Of course, with Congress returning to Washington for a busy lame-duck session, there is much left for us to do. But the results speak for themselves. With your continued support and involvement, there is no limit to what ICBA, our affiliated state associations and the community bankers of this great nation can achieve. Thank you for your partnership.
All the best,