FOR IMMEDIATE RELEASE
ICBA Testifies on Regulatory Relief at House Committee Hearing
Jorde Urges Adoption of Communities First Act Provisions
Washington, D.C. (May 19, 2005) - In testimony today before the House Financial Institutions and Consumer Credit Subcommittee, Terry Jorde, chairman-elect of the Independent Community Bankers of America (ICBA) said that America's small businesses and its communities will have less access to much-needed credit if community banks "don't receive meaningful relief soon," because "more and more of them will throw up their hands and give up their independence."
Jorde praised FDIC Vice Chairman John Reich for leading the interagency effort to identify banking regulations that are unnecessarily burdensome, but noted that more progress must be made to help community banks remain a vital part of the nation's economic backbone. She agreed with Reich's view that "the disproportionate impact of the regulatory burden on community banks is a leading cause of consolidation in our industry."
In her testimony, Jorde urged the committee to include provisions in the Communities First Act (H.R. 2061) introduced by Rep. Jim Ryun (R-KS) in its broader regulatory relief bill. H.R. 2061 would provide targeted regulatory relief for community banks and their customers and strengthen communities by freeing up resources currently used for compliance. It was introduced to give community banks the relief that had not been included in previous regulatory relief bills, which contained relief for big banks, thrifts and credit unions, but did little to address concerns of community banks and their customers.
"One of the most wasteful provisions of the Gramm-Leach-Bliley Act has been the requirement that financial institutions send annual privacy notices even when they don't share information or their policies have not changed," Jorde said. "Section 203 of the Communities First Act would at least greatly reduce the number of notices that must be mailed. While any size institution could take advantage of this provision, community bankers are especially interested in this option."
ICBA has been strongly supporting the comprehensive review of bank regulations to reduce the compliance burden to community banks. ICBA believes in a tiered regulatory and supervisory system that recognizes the differences between community banks and more complex institutions, since the regulatory requirements impose a disproportionate burden on community banks with their limited resources and diminishes their ability to serve their communities, attract capital and support the credit needs of their customers.
Terry Jorde, president and CEO of CountryBank USA in Cando, North Dakota, is the chairman-elect of ICBA and a member of the ICBA executive committee and board of directors.
See the full text of Jorde's testimony at www.icba.org/pressroom.