The Senate is expected to vote next week on pro-community bank legislation, the bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155). The Independent Community Bankers of America® is offering a rundown of how the measure would benefit local communities.
What’s in the Bill:
The legislation, which passed the Senate Banking Committee in December on a strong bipartisan vote, includes numerous provisions from ICBA’s pro-growth Plan for Prosperity platform to:
- 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,
- create a short-form call report for use in the first and third quarters by certain well-rated community banks,
- expand eligibility for the 18-month regulatory examination cycle to more community banks,
- ease appraisal requirements to facilitate mortgage credit in local, rural 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, and easing of stress testing and formal risk committee requirements.
Why S. 2155 Matters:
S. 2155 would stimulate local economic growth by providing much-needed community bank regulatory relief while preserving vital consumer protections and effective regulatory supervision. Main Street community banks are burdened by regulations designed for Wall Street institutions, which is fueling banking industry consolidation and leaving local communities with fewer financial services options.
A recent survey from the Federal Reserve and Conference of State Bank Supervisors found that community bank compliance costs have increased by nearly $1 billion in the previous two years to 24 percent of their net income. Of the respondents who said they considered an acquisition offer in the past year, virtually all (96.7 percent) cited regulatory costs.
Why Regulatory Relief Is Important:
Community banks are the economic lifeblood of local communities across the nation. While holding less than 20 percent of the nation’s banking assets, community banks fund more than 60 percent of small-business loans and more than 80 percent of U.S. agricultural loans. Further, community banks operate in areas many other banks won’t touch, serving as the only physical banking presence in nearly one in five U.S. counties, according to the FDIC.
Who Has Signed On:
S. 2155 enjoys broad bipartisan support from 26 co-sponsors, including 13 Republicans, 12 Democrats and one Independent. 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.) spearheaded the legislation. Other co-sponsors include 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.), Jim Risch (R-Idaho), Dean Heller (R-Nev.), Roy Blunt (R-Mo.), Ben Sasse (R-Neb.), Tim Kaine (D-Va.), Angus King (I-Maine), Joe Manchin (D-W.Va.), Claire McCaskill (D-Mo.), Gary Peters (D-Mich.), Michael Bennet (D-Colo.), Christopher Coons (D-Del.), Thomas Carper (D-Del.), and Doug Jones (D-Ala.).
What Community Bankers Are Saying:
“S. 2155 offers much-needed relief for our nation’s nearly 5,700 community banks to promote localized lending and economic growth,” ICBA President and CEO Camden R. Fine said. “This important legislation is the culmination of a years-long effort to tailor regulations to our nation’s smaller and less risky community banks. If you’re against S. 2155, you’re against community banks and the communities they support.”
“S. 2155 enjoys broad bipartisan support because it offers pro-growth relief for Main Street—not Wall Street,” said ICBA Chairman Scott Heitkamp, president and CEO of ValueBank Texas in Corpus Christi. “Any senator who supports their state’s community banks and believes in our mission to serve local communities should vote in favor of this critical legislation.”
“Since the financial crisis, members of both political parties have lamented the decline in the number of community banks around the nation,” Kathryn Underwood, president and CEO of Ledyard National Bank in Hanover, N.H., wrote in a recent op-ed. “Now is the time for them to stand up for their communities and support the institutions like ours that make a meaningful impact every day.”
Want to Know More?
For a comprehensive look at ICBA and community banker advocacy on behalf of this legislation, visit ICBA’s “Community Bankers Support S. 2155” webpage. For more information on what’s in S. 2155, view ICBA’s summary of the bill’s key provisions by asset size.
To schedule an interview with a community banking expert, please contact Aleis Stokes at firstname.lastname@example.org or (202) 821-4457 and Nicole Swann at email@example.com or (202) 821-4458.
The Independent Community Bankers of America®, the nation’s voice for nearly 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.