The following hot-button issues are top priorities as ICBA advocates common-sense reforms on behalf of community banks and the communities they serve.
The 118th Congress is split between a Republican controlled House and a Democratic-controlled Senate. In a divided Congress, only bipartisan legislation will be enacted.
ICBA expects Congress to focus on regulation of fintech and crypto assets, the SAFE Banking Act, climate risk, tax cut extensions, and agency oversight, as well as non-financial issues such as crime and border security. ICBA will continue to promote bipartisan policy favorable to community banks.
ICBA is opposing proposals under consideration in the Administration, the agencies, and Congress to create new mandates regarding climate risk. Proposals include stress testing for the impact of weather events on bank-held assets, concentration limits, increased disclosures, and other mandates.
The FDIC has finalized a 2-basis point increase in the deposit insurance assessment rate, effective in the first quarter assessment of 2023. ICBA is pressing the FDIC to reduce assessment rates for community banks when the DIF reaches 1.35 percent, which is likely to occur as soon as the first quarter of 2023.
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.
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 system wide changes that would put customer data at risk.
ICBA is urging the Federal Housing Finance Agency (FHFA) to modernize its regulatory capital standards and conform them with those of the federal banking regulators.
Currently, FHFA requires banks to recognize unrealized “paper losses” on debt securities held for sale. Banks with negative tangible equity due to such “losses” are ineligible for new or increased existing FHLB advances, an important source of liquidity and lending.
The CFPB’s proposed rule would require banks to collect and report data on loan applications from small businesses, as required by the Dodd-Frank Act. The proposed rule, which would apply to banks that originate 25 or more small business loans per year, fails to recognize the customized nature of small business lending. The rule will be finalized before the end of March.
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 cannabisrelated 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 advocates for enhancing USDA guaranteed loans, maintaining strong crop insurance products, and ensuring commodity programs provide a stable safety net for American agriculture.
ICBA will lobby for a robust Farm Bill in 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.