By Rebeca Romero Rainey
With Labor Day behind us and summer coming to its unofficial end, now is a good time to reflect on what the community banking industry has achieved so far this year in the advocacy arena—and what remains to be done this fall.
Fortunately for the local communities we serve, community banks have followed the historic successes of 2018 with many notable policy victories.
There is perhaps no more significant advocacy win this year than the Federal Reserve's decision to develop a real-time payments system—a longtime ICBA priority. Even more recently, the triggering of approximately $764 million in deposit-insurance assessment credits brings to fruition an advocacy effort that was instituted into law way back in 2010. We also welcomed the recent agency announcement emphasizing the benefits of using a standardized approach to cybersecurity preparedness without mandating any particular assessment, as ICBA has long advocated.
These are far from the only advocacy victories of 2019, which also include:
- the scheduled Senate vote to approve Fed Governor Michelle "Miki" Bowman's nomination for a full 14-year term in the Fed’s ICBA-advocated community banking seat,
- proposed delays to the effective date of the Current Expected Credit Loss accounting standards for many community banks until 2023,
- ensuring Subchapter S community banks received beneficial tax relief from tax reform,
- a soon-to-be-released final rule raising the threshold for residential real estate transactions requiring an appraisal from $250,000 to $400,000, the first increase since 1994,
- the Labor Department's release of a more favorable proposal on overtime pay, and
- implementation of pro-community bank policies from the 2018 farm bill.
And while most provisions of the landmark S. 2155 regulatory relief law are in effect—including qualified mortgage, examination, Volcker Rule, Home Mortgage Disclosure Act, and reciprocal deposit relief—two outstanding provisions illustrate the fact that community banking advocacy never ends.
ICBA continues to strongly advocate an 8 percent Community Bank Leverage Ratio to maximize relief from complex risk-based capital rules. Meanwhile, the agencies' short-form call report fails to meet the intent of Congress and remains an ongoing ICBA priority. Other key policy battles for the remainder of the year include:
- pushing back against tax-exempt credit unions, the Farm Credit System, and new industrial loan companies attempting to mix banking and commerce,
- advancing ICBA-backed cannabis-banking safe harbor legislation in the House and Senate,
- maximizing community banking relief within policymaker efforts to reform the Bank Secrecy Act and Community Reinvestment Act,
- reauthorizing the National Flood Insurance Program, and
- ensuring community banks are represented in the debate over housing-finance reform.
ICBA continues to depend on and appreciate the limitless support of the nation's community banks and our affiliated state associations as we work these many issues. These initiatives—which have been years in the making—show that our beloved industry focuses not on short-term gimmicks and soundbites, but meaningful, big-picture achievements in Washington and back home.
And we do it without losing sight of those we serve. While the nation's largest companies recently updated their corporate statement of purpose to include the interests of customers, employees, and communities, this is how community banks have always operated. This is what drives our banks to remain rock-solid leaders in local communities nationwide, and it is what motivates our tireless advocacy efforts and opens doors to policy gains in our nation's capital.
Thank you, community bankers, for your unwavering support thus far in 2019. As the days become cooler and shorter this fall, let's continue our steady push for additional policy victories that will benefit local communities and propel us into another prosperous new year.
Rebeca Romero Rainey is ICBA president and CEO.