The Independent Community Bankers of America (ICBA) strongly support the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155), which the Senate is expected to vote on this week.
The ICBA said the bill would provide regulatory relief for community banks, which, in turn, would stimulate local economic growth.
Specifically, the bill would 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 some community banks, expand eligibility for the 18-month regulatory examination cycle to more community banks, and ease appraisal requirements to facilitate mortgage credit in local, rural communities.
Further, it would 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, include higher asset thresholds for systemically important financial institution designations, and ease stress testing requirements.
“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 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.”
Community bank compliance costs have increased by nearly $1 billion in the previous two years to 24 percent of their net income, according to a recent survey from the Federal Reserve and Conference of State Bank Supervisors.
“S. 2155 enjoys broad bipartisan support because it offers pro-growth relief for Main Street—not Wall Street,” ICBA Chairman Scott Heitkamp, president and CEO of ValueBank Texas in Corpus Christi, said. “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.”
The bill has 26 co-sponsors, including 13 Republicans, 12 Democrats, and one Independent.
“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, New Hampshire, said. “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.”