The following hot-button issues are top priorities as ICBA advocates common-sense reforms on behalf of community banks and the communities they serve.
In the wake of high-profile, large-bank mismanagement, failures, and rescues, ICBA is leading a media and advocacy campaign to reassure community-bank customers that their deposits are safe. Any policy responses from the banking agencies or Congress must recognize that community banks are fundamentally different than larger, more complex, riskier banks. ICBA is pressing the White House, FDIC, and all bank regulatory agencies to exempt community banks from any special assessment to replenish the deposit insurance fund (DIF) or new regulation.
The CFPB published its final rule under Dodd-Frank Section 1071. Despite some marginal improvements, such as increasing exemption threshold and removing the requirement that a lender ‘guess’ the race/ethnicity of an applicant, the final rule is a missed opportunity to exempt a broad swath of community banks and limit the data points to be collected to those required by Congress. ICBA is urging the Bureau to stay the effective data of the final rule until the Supreme Court rules on the constitutionality of the Bureau’s funding structure.
ICBA submitted extensive comments urging the Bureau to exempt community banks below $1.3 billion in assets, collect only statutorily-mandated data, and keep small-business borrower information private. ICBA mobilized bankers and business owners nationwide, collecting and submitting detailed comment letters from nearly 300 community banks and small businesses.
ICBA Chairman-elect Lucas White and ICBA banker Troy Peters testified before Congress in March about the unintended consequences of the rule (Links here and here).
ICBA is opposing proposals under consideration in the Administration, the agencies, and Congress to create new climate-risk mandates. Proposals include stress testing for the impact of weather events on bank-held assets, concentration limits, increased disclosures, and other mandates.
Unregulated crypto assets, including stablecoins, as well as decentralized finance (DeFi), threaten to disintermediate community banks and heighten risks for the wider economy and must be brought within the regulatory perimeter.
ICBA strongly opposes efforts to grant nonbank stablecoin issuers access to the Federal Reserve master account and the creation of a U.S. CBDC, which would directly compete with community bank deposits needed to fund local lending. ICBA will continue to work with regulators, policymakers, and standards-setting bodies to address serious risks to financial stability, consumer protection, and community bank lending.
Durbin Amendment Expansion Legislation. ICBA opposed legislation to create new credit card routing mandates, expanding on the Durbin Amendment’s interchange restrictions. While the Credit Card Competition Act of 2022 is designed to apply to banks with over $100 billion in assets, community banks would be forced to subsidize costly systemwide changes that would put customer data at risk.
The industrial loan company (ILC) loophole allows commercial companies to own ILCs and evade holding company supervision. ICBA is promoting bipartisan legislation that would close the ILC loophole, grandfather existing ILCs, and address pending applications.
Congress and the regulators should carefully consider the unintended consequences of any new overdraft restrictions targeting so-called “junk fees,” a gross mischaracterization of the White House and CFPB. Overdraft legislation or regulations should not punish community bank customers by restricting access to services of convenience that meet their account needs.
The mission of this campaign is to pursue legislative and regulatory changes to address the expansion of credit unions and to draw media and public attention to the industry’s aggressive and abusive exploitation of their tax exemption.
ICBA is opposing legislative and agency proposals for SBA direct 7(a) lending. Such proposals would sideline community bank lenders, reduce access to small business credit, and be prone to fraud. ICBA also strongly opposes an SBA proposal to allow fintechs to originate 7(a) loans thereby increasing fraud risk.
ICBA supports the ECORA Act (H.R. 1977/S. 2202) which would create a tax exclusion for interest on loans secured by agricultural land and residential mortgages in rural communities. ICBA has launched a grassroots campaign to promote cosponsorship of ECORA.
ICBA supports legislation that would create a safe harbor from federal sanctions for financial institutions that serve cannabis-related businesses in states where cannabis is legal.
The federal banking agencies have jointly proposed a revised CRA rule that would create new data collection and reporting burdens for many community banks. ICBA is urging the agencies to make a set of recommendations that would ease community bank compliance. A final rule is expected in early 2023.
ICBA came out early and forcefully against IRS account reporting, launching media and grassroots campaigns and leading cross-industry letters to Congress. The proposal was omitted from the House-passed Build Back Better Act. ICBA continues to oppose its inclusion in a Senate bill.
Early versions of the Build Back Better Act included provisions to tax capital gains at death and raise the corporate rate, among other adverse provisions. While these provisions are no longer under consideration, due in part to ICBA’s advocacy, other harmful tax increases remain in play. ICBA continues our campaign against them.
As a result of an ICBA lobbying and grassroots campaign, a bill to impose restrictions on bank overdraft practices was withdrawn from a scheduled markup in the House Financial Services Committee.
