FOR IMMEDIATE RELEASE
ICBA Underscores Community Bank Commitment to Goals of the Community Reinvestment Act
Washington, D.C. (Feb. 13, 2008)—The Independent Community Bankers of America (ICBA) told Congress that community bankers are strongly committed to the goals of the Community Reinvestment Act (CRA) and emphasized that community investment and development are at the core of each community bank's mission.
"Community banks, as locally-owned and operated institutions, are engaged in community reinvestment and development on a daily basis," said Cynthia L. Blankenship, ICBA chairman-elect and vice-chairman and chief operating officer of Bank of the West, Irving, Texas, in testimony before the House Financial Services Committee's CRA oversight hearing. "The health of a community bank and the economic vitality of its community depend on one another. If our communities don't thrive, neither do we."
ICBA also strongly believes that the nation's credit unions should also comply with CRA. "The credit union world has changed substantially since Congress enacted CRA in 1977 when credit unions mostly served members of a single group with a limited product line," said Blankenship. Today, the distinctions between community banks and credit unions have virtually disappeared. Credit unions should also comply with the same CRA requirements as community banks, she said.
Noting that regulations fall more heavily on community banks than they do on large nationwide banks, Blankenship called on Congress to advance public policy that provides incentives and removes unnecessary regulatory costs that detract from community banks' ability to serve their communities.
Among ICBA's recommendations are:
- Reducing Small Business Administration fees and permitting a low-documentation loan program for seasoned lenders;
- Expanding the Federal Home Loan Bank System's Community Financial Institution program by raising the eligibility threshold of community banks which can participate to $1 billion in assets;
- Enacting regulatory relief provisions included in the ICBA-backed Community Banks Serving Their Communities First Act of 2007 (H.R.1869).
ICBA also thanked lawmakers and federal regulators for advancing improvements in CRA examination procedures and paperwork reduction. "The tiered examination system is an excellent example of constructive change that has reduced the burden of regulation while enhancing effectiveness," Blankenship said.
Read ICBA's testimony at www.icba.org.