ICBA News Release

ICBA Independent Community Bankers of America

PR Contact
Tim Cook
ICBA Director of Communications
202-659-8111

Industry Expert
Steve Verdier
ICBA Senior Vice President & Director of the Congressional Affairs Group
202-659-8111

FOR IMMEDIATE RELEASE

ICBA Urges Reforms to Gramm-Leach-Bliley

View Testimony

Washington, D.C. (July 13, 2004) - Independent Community Bankers of America strongly urged Congress today to take action on a number of issues involving the Gramm-Leach-Bliley Act of 1999 (GLB).

In testimony before the Senate Banking Committee, ICBA Vice Chairman Terry Jorde recommended that Congress close the industrial loan company (ILC) loophole; ease a growing competitive imbalance from increased financial concentration; and pass a key Federal Home Loan Bank amendment.

ICBA's chief recommendation was to close the ILC loophole, which allows a commercial firm to purchase an ILC-a hybrid financial institution currently permitted by five states-and breach the longstanding barriers separating banking and commerce. Jorde said bringing ILCs under the Bank Holding Company Act to close the loophole would be consistent with earlier action over GLB. In passing GLB, Congress deliberately closed a similar loophole to prevent commercial firms from entering banking by purchasing unitary thrifts.

Another major concern for ICBA, Jorde said, is the increased industry concentration GLB fostered, which has decreased competition while increasing systemic risk. To offset the imbalance created by newly formed trillion-dollar financial conglomerates, she said, Congress should cut community banks' regulatory burden. She cited examples involving CountryBank USA, the $37 million-asset bank where Jorde is president and CEO, to show how regulations are straining community bank resources far more than mega-banks, and diverting resources from customer and community service. ICBA has long advocated reducing the disproportionately heavy regulatory burden falling on community banks.

"The relative cost for regulatory compliance for a community bank can be double or triple what it costs for a mega-bank," Jorde said. "There are ways to streamline the burden while still ensuring the safety of banking on the community level."

In addition to the ILC loophole and financial concentration, Jorde urged Congress to pass an amendment by Sen. Michael Enzi (R-Wyo.) that would clarify the mission of the Federal Home Loan Bank system. The clarification would encourage Federal Home Loan Banks to accept small business and agricultural assets as collateral for advances, as authorized by GLB, to help community banks fund small business and agricultural loan demand. The amendment is part of legislation to reform the regulation and supervision of the housing government-sponsored enterprises that cleared the Senate Banking Committee.




All contents copyright 2014 Independent Community Bankers of America. All rights reserved.
Privacy Statement | Legal Notice