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ICBA Announces 2014 Community Banking Policy Priorities

Agenda focuses on reducing excessive regulatory burdens, housing finance reform, ending too-big-to-fail

Honolulu (March 4, 2014)—The Independent Community Bankers of America® (ICBA) today announced its top legislative and regulatory priorities for 2014. ICBA made the announcement in Honolulu at its 2014 National Convention, which has attracted more than 3,000 attendees—making it the largest community banking industry event in the world.

“ICBA advances its top policy priorities each year to guarantee all community banks have the opportunity to support greater economic growth, job creation and prosperity nationwide,” said John H. Burhmaster, incoming ICBA chairman and president of 1st National Bank of Scotia, N.Y. “ICBA’s policy agenda is focused on reducing excessive regulatory burdens community banks face, ending too-big-to-fail and fostering ways to create greater, stronger economic growth in communities across the country.”

ICBA’s top priorities for 2014 include:

Advocating meaningful legislative and regulatory reforms, including tiered regulations for community banks, their customers and their communities. ICBA developed the Plan for Prosperity for the 113th Congress, which contains a number of targeted provisions that would provide regulatory relief for community banks so they can dedicate more time and resources to serving their communities. More broadly, ICBA strongly supports a system of tiered regulation—regulatory and supervisory policies that differentiate between community banks and other financial services providers. The basic framework of financial regulation should be based on the principle of tiering proportionate to size, business model, complexity and risk.


Expanding exemptions and accommodations for well-underwritten community bank mortgages. Efforts to stop abusive lending practices should not prohibit responsible, though not conventional, loan products created to meet the diverse needs of consumers, such as lower-income borrowers, borrowers in rural and underserved communities, or first-time homebuyers. Community banks serve non-traditional borrowers but in a safe, structured way. As a key provision in ICBA’s Plan for Prosperity, ICBA supports legislation that would provide “qualified mortgage” status under the CFPB’s “ability-to-repay” rules for loans originated and held in portfolio by community banks, including balloon mortgages, regardless of loan pricing.

Ensuring that reforms of the housing-finance system do not disrupt the housing recovery. Robust secondary market access is critical for community banks to support mortgage lending demand in their communities, particularly the demand for long-term, fixed-rate lending. Any reform of the housing finance system must preserve aspects of the current government-sponsored enterprise secondary mortgage market structure that have worked well for community banks. ICBA welcomes a return to a more balanced and less concentrated housing finance system with an appropriate role for portfolio lenders, originate-and-sell lenders and small and large lenders.

Prohibiting the development of any impairment model for loans and investment securities that places undue cost burdens on community banks. When accounting standards are developed, provisions should be made for smaller financial institutions and businesses so that the cost of implementing the standards does not outweigh their benefit to financial statement users. ICBA opposes the Financial Accounting Standard Board’s operating lease proposal, which would require recognition of long-term operating leases on the balance sheet for both lessors and lessees.

Supporting legislative and regulatory changes that would improve the ability of community banks to raise capital to better serve their local communities. Community banks need capital to make loans and to provide essential banking services. ICBA supports either amending the Bank Holding Company Act or replacing it with a new Community Bank Holding Company Act that would make it easier for community bank holding companies to issue debt and equity that could be used to support their banking subsidiaries.

Protecting consumers’ financial information with more comprehensive federal data security and fraud laws.
Community banks remain strong guardians of the security and confidentiality of sensitive customer information; however, they are often forced to spend millions of dollars to reissue cards, monitor for indications of suspicious activity and reimburse consumers for confirmed fraudulent charges.  The nations’ community banks have already reissued more than 4 million debit and credit cards at a total reissuance cost of more than $40 million following recent data breaches at major retailers. The association strongly advocates that the costs of data breaches should ultimately be borne by the party at fault for the breach and that all participants in the payments system—including merchants—should be subject to comparable Gramm-Leach-Bliley Act data security standards that currently apply to banks.  Additionally, a national data-security breach and notification standard should be implemented to replace the current patchwork of state laws and barriers to effective threat-information sharing between law enforcement and the financial and retail sectors should be removed.  While community banks and other financial institutions continue to move to chip technology for debit and credit cards, these technologies alone may not have prevented the recent retailer breaches.

Advocating tax laws that promote robust economic activity and a vibrant community banking sector and foster saving and investment. ICBA will continue to promote tax and budget policies that foster economic growth and support the community banking industry by providing direct tax relief and encouraging private savings and small business investment. Tax reform should encompass both corporate and individual tax laws so as not to distort or disadvantage one form over another.

Urging Congress to restrict the FCS to its historical mission of serving the agricultural marketplace.  The association adamantly opposes the FCS’s expansionist agenda to allow FCS lenders to become the equivalent of commercial banks while retaining their GSE status and inherent tax and funding advantages. The Farm Credit Act should further define and narrowly target FCS lending activities to refocus on serving bona fide farmers and ranchers and young, beginning and small farmers and their farmer-owned cooperatives.

Urging Congress to review the credit union industry’s unwarranted federal tax subsidy. ICBA continues to oppose expanded powers for credit unions, particularly the proposal to raise the cap on member business lending, as long as credit unions remain exempt from taxation and the Community Reinvestment Act. The association also opposes legislation that would allow credit unions to raise supplemental capital and, in effect, cease being exclusively member-owned cooperative entities—a condition of their original tax exemption.

Supporting legislation and regulatory changes that would end megabank advantages. The greatest ongoing threat to the safety and soundness of the U.S. banking system is the dominance of a small number of too-big-to-fail megabanks.

Advocating the use of reliable standards for evaluating a community bank’s fair-lending practices. ICBA opposes changes to methodologies, standards or analysis used to assess fair-lending compliance without providing proper notice to community banks. ICBA supports transparency regarding the legal theories and methodologies used when enforcing fair-lending laws, and it opposes any cause of action under the Fair Housing Act for disparate impact without a finding of intentional discrimination. 

Continuing to support legislation that ensures accountability for consumer-protection regulations. ICBA supports legislation that would replace single-director governance of the CFPB with a five-member commission. Regulations promoted by the CFPB must provide community banks with the flexibility to meet the unique needs of their customers without loading community banks with additional regulatory burdens that would prevent them from better serving their local communities.

Supporting additional accommodations for community banks to ensure capital standards do not inhibit lending in local communities.

For more information, visit www.icba.org.

About ICBA
The Independent Community Bankers of America®, the nation’s voice for nearly 7,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.

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