“The financial and economic crisis that our country is currently navigating makes it clear that some reform is necessary to ensure that we never again face such a catastrophe in the future. ICBA appreciates that this legislation includes strong measures that would protect our financial system and America’s taxpayers by holding accountable the systemically dangerous megafirms and unregulated nonbanks that were the root cause of this crisis—measures for which ICBA has been a leading proponent. ICBA thanks House Financial Services Committee Chairman Barney Frank (D-Mass.) and his committee for their work on this legislation and for considering the needs of our nation’s more than 8,000 Main Street community banks throughout the process.
“ICBA is pleased that the bill would create a more equitable financial system. ICBA has been a leading advocate for creating parity between large and small banks and applauds the House for including measures in the bill to not only hold too-big-to-fail firms accountable but to create deposit premium fairness between Wall Street and Main Street. In particular, the bill includes an ICBA proposal to broaden the FDIC assessment base by allowing the FDIC to determine bank premium assessments using total assets (minus tangible equity), not just domestic deposits. ICBA thanks Reps. Luis Gutierrez (D-Ill.) and Donald Manzullo (R-Ill.) for their efforts to create much-needed parity between large and small banks.
“ICBA has concerns about the creation of a Consumer Financial Protection Agency (CFPA); however, we are pleased that the House voted to establish a special unit within the proposed agency to ensure that common-sense community banks are not disproportionately affected by its regulations. Community banks have always made and continue to make consumer protection a priority and they did not perpetrate the abuses that caused this crisis; therefore, they should not have to pay the price for other’s ill-deeds. ICBA is pleased that Chairman Frank and his committee included provisions that would give community banks with assets less than $10 billion direct relief from CFPA examinations since it would keep community bank examinations, both compliance and safety and soundness, with the banking agencies and would bar the CFPA from assessing any fees against these banks for purposes of funding the agency. Also, bank regulators, instead of the CFPA, would have primary authority to enforce violations of consumer laws for community banks. ICBA also appreciates that the manager’s amendment clarifies that CFPA provisions do not create any new private rights of action and provides greater certainty about the rights and responsibilities of financial service providers under the legislation.
“The manager’s amendment would also tighten nationwide deposit-concentration limits. ICBA was the only national financial trade group fully supportive of tightening the 10 percent nationwide deposit cap because it will help block the creation of too-big-to-fail institutions and we are pleased the bill includes this measure.
“ICBA is also pleased that the House voted down an ICBA-opposed amendment that would have stripped language to exclude small publicly held companies, including many community banks, from the costly regulatory burden of complying with Section 404(b) of the Sarbanes-Oxley Act of 2002.
“Furthermore, ICBA appreciates that the mortgage-bankruptcy ‘cramdown’ amendment was excluded from the bill. The cramdown measure would have resulted in higher interest rates for homebuyers, make it harder for families to qualify for a home mortgage and undermine ongoing efforts to help families facing foreclosure. Additionally, it would have had the ability to further destabilize the housing sector and set a very dangerous precedent, jeopardizing the integrity of all public contracts.
“ICBA looks forward to working with the Senate as the legislation moves forward to address these and any additional concerns so community banks can continue to proudly serve their customers in cities and towns throughout America, and help our local economies and our national economy recover and rebuild.”