Too Big to Fail & Systemic Risk (Including Systemic Risk)

The Wall Street financial crisis and government intervention of 2008 affirmed that the nation’s largest megabanks are “too big to fail”—so big and interconnected that the government will not allow them to fail.

As ICBA details in its “End Too-Big-To-Fail” study, too-big-to-fail distorts free markets, incentivizes risky behavior, leaves taxpayers on the hook, and creates unfair competitive advantages for the largest banks. Meanwhile, community banks face oppressive regulatory burdens as a direct result of megabank misdeeds.

A less concentrated and more diverse financial system would decrease systemic risk, improve competition and innovation, and increase the availability of consumer credit. ICBA and the nation’s community banks are dedicated to ending too-big-to-fail.

Articles & Press Releases

ICBA Supports Senate Community Bank Regulatory Relief Agreement

Nov 13, 2017
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Bipartisan legislative agreement includes many provisions from ICBA Plan for Prosperity

Washington, D.C (Nov. 13, 2017)—The Independent Community Bankers of America® (ICBA) today expressed its support for a bipartisan Senate legislative agreement that would stimulate local economic growth by providing much-needed community bank regulatory relief. With numerous provisions from ICBA’s pro-growth Plan for Prosperity regulatory relief platform, the bipartisan bill would provide community banks with relief from excessive and unnecessary regulatory burdens that impede their ability to meet the needs of their customers and communities.

“ICBA strongly supports the bipartisan regulatory relief package announced today and thanks Senate Banking Committee Chairman Mike Crapo and Sens. Joe Donnelly, Heidi Heitkamp, Jon Tester and Mark Warner for driving this agreement,” ICBA President and CEO Camden R. Fine said. “Community bank regulatory relief is needed to improve lending and strengthen economic growth at the local level. We are pleased to see many provisions of ICBA’s Plan for Prosperity included in the agreement and thank all senators from both sides of the aisle who have contributed to this important initiative.”

The bipartisan legislative agreement includes ICBA-advocated provisions to:

  • increase exemption thresholds for Home Mortgage Disclosure Act reporting,
  • provide “qualified mortgage” status for portfolio mortgage loans at most community banks,
  • exempt certain community bank loans from escrow requirements,
  • simplify community bank capital requirements,
  • increase eligibility for a short-form call report to restore proportionality to quarterly reporting,
  • expand eligibility for the 18-month regulatory examination cycle,
  • ease appraisal requirements to facilitate mortgage credit in local communities,
  • exempt most community banks from the Volcker Rule,
  • expand access to the Federal Reserve’s Small Bank Holding Company Policy Statement to help more community banks build capital,
  • improve regulatory treatment of reciprocal deposits and certain municipal securities, and
  • provide relief for larger community banks, including higher asset thresholds for systemically important financial institution designations, stress testing and risk committees.

Senate Banking Committee Chairman Mike Crapo (R-Idaho) and committee Democrats Joe Donnelly (Ind.), Heidi Heitkamp (N.D.), Jon Tester (Mont.) and Mark Warner (Va.) drove the agreement. Joining as original co-sponsors are Sens. Bob Corker (R-Tenn.), Tim Scott (R-S.C.), Tom Cotton (R-Ark.), Mike Rounds (R-S.D.), David Perdue (R-Ga.), Thom Tillis (R-N.C.), John Kennedy (R-La.), Jerry Moran (R-Kan.), Tim Kaine (D-Va.), Angus King (I-Maine), Joe Manchin (D-W.Va.), Claire McCaskill (D-Mo.), and Gary Peters (D-Mich.).

The bill is expected to be formally introduced later this week, and ICBA will carefully review the legislative language. ICBA looks forward to continuing to work with the Senate, House and Trump administration on bipartisan regulatory relief that will help community banks promote economic growth in their communities.

About ICBA

The Independent Community Bankers of America®, the nation’s voice for more than 5,700 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. For more information, visit ICBA’s website at www.icba.org.

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Letters to Congress

Title Recipient Date
Senators Crapo and Brown
09/12/2017

Letters to Regulators

Title Recipient Date
Federal Reserve, OCC
06/12/2018
Federal Reserve, OCC
05/08/2018
Federal Reserve Bank of Minneapolis
01/17/2017
OCC, Federal Reserve, and FDIC
08/03/2016

Testimonies

Title Committee Presenter Date

Summaries

Title Content Type Date