Federal Reserve Governor Michelle Bowman expressed concerns with the community bank impact of regulators’ Community Reinvestment Act final rule and other recent agency actions.

Remarks on CRA: Speaking in Columbus, Ohio, Bowman said the rule would treat as large banks a wide range of community banks with more than $2 billion in assets, subjecting them to new and stricter requirements. Community banks should have the option to opt into the new retail lending test and assessment areas or to continue with the existing framework, she said.

Interchange, Climate Concerns: Bowman also said:

  • The Fed’s proposed rule to lower the maximum interchange fee that covered debit card issuers may receive for debit card transactions would continue to affect a broader range of issuers, including community banks.

  • Interagency climate risk principles for institutions with at least $100 billion in assets could trickle down to smaller institutions.

SEC Climate Concerns: Also Tuesday, the Securities and Exchange Commission’s Mark Uyeda said his agency should consider reissuing its proposed climate-related disclosures for investors. Speaking in New York, Uyeda said the SEC should do everything possible to avoid a rule that is costly and ineffective.

ICBA View: ICBA has expressed concerns with:

  • The CRA rule’s disproportionate implementation costs for community banks.

  • The interchange proposal’s impact on smaller card issuers, including those intended to be exempt from the proposal.

  • Language in the climate principles describing all financial institutions and their potential application to community banks.

  • The impact of the SEC’s climate disclosures on community bank participation in the public capital markets.