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ICBA: New Study Shows Need for Community Bank Regulatory Relief

George Mason University survey finds burdens will reduce access to mortgage services

Washington, D.C. (Feb. 28, 2014)—The Independent Community Bankers of America® (ICBA) today said a new George Mason University study on new community bank regulatory burdens demonstrates the need for targeted regulatory relief for these institutions. 

The Mercatus Center’s Small Bank Survey found that community banks serving mostly rural and small metropolitan markets have reported significantly higher compliance costs following new regulations implemented under the Dodd-Frank Act. These costly burdens on Main Street financial institutions validate the need for common-sense regulatory relief provisions in legislation such as the Community Lending Enhancement and Regulatory (CLEAR) Relief Act (H.R. 1750/S. 1349) and other measures inspired by ICBA’s Plan for Prosperity regulatory relief platform.

“To ensure community banks can continue to drive economic growth and job creation, our nation’s banking regulations must be calibrated to these institutions’ size, lower risk profile and traditional business model,” Bill Loving, ICBA chairman and president and CEO of Pendleton Community Bank, Franklin, W.Va., said. “As today’s George Mason University study shows, community banks are sinking far too many resources into unnecessary and burdensome compliance—resources that would otherwise be used to promote local economic growth. By rebalancing our nation’s regulatory approach through targeted relief available in the CLEAR Relief Act and ICBA’s Plan for Prosperity, we can support greater local investment to improve the quality of life in our communities.”

The Mercatus Center’s Small Bank Survey found that compliance costs have increased for more than 90 percent of community bank respondents. The survey found that this increased burden has led community banks to reconsider their product and service offerings, including whether to stop providing residential mortgages and overdraft protection to local customers.

To combat excessive regulatory burdens on community banks, the CLEAR Relief Act would provide relief from new mortgage regulations that threaten the availability of mortgage credit, from unnecessary accounting and auditing expenses, and from redundant privacy notice mandates. ICBA also continues to support other bills that advance provisions of the association’s Plan for Prosperity.

For more information on ICBA’s Plan for Prosperity and other initiatives to provide much-needed regulatory relief for the nation’s community banks, 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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