Community Banks Release Policy Wish List
The Independent Community Bankers of America (ICBA), the national association for community banks, released its 2019 policy priorities during its Capital Summit in Washington, D.C. on April 29. According to ICBA, community banks make up 99 percent of all U.S. banks, which would include all 18 native-owned banks. These banks also employ more than 750,000 people serving in more than 52,000 locations nationwide.
Among their 15 policy priorities for the upcoming year, regulatory relief may be the most important. According to ICBA, community banks are often impeded by overly burdensome regulatory and paperwork requirements imposed by government regulators. Large banks may have the resources and staff to offset these regulatory costs, but smaller banks struggle to meet the rigorous requirements.
ICBA urges federal regulators to fully implement Congress’ large regulatory relief bill passed last year (S.2155). Although most of the legislation has been implemented, ICBA specifically asks regulators to move quickly on capital simplification and short form call reports.
ICBA’s policy priorities also include changes at the CFPB. It calls for replacing the single-director governance structure with a five-member commission, and urges the CFPB to provide more regulatory guidance rather than use enforcement actions to ensure compliance.
Although it does not seem likely that the structure of the CFPB will change anytime soon, it appears that Kathy Kraninger, director of the CFPB, agrees with ICBA’s call for guidance over enforcement when it comes to regulatory compliance.
In a recent speech, Kraninger said that it was an important “responsibility under the law to reduce unwarranted regulatory burden and to consider the impact of rulemaking on regulated entities and consumers. The CFPB must acknowledge that the costs imposed on regulated entities absolutely affect access to, and the availability of, credit to consumers.”
In addition, the ICBA asked for a “safe harbor” from federal actions on banks doing business with cannabis-related businesses (CRBs), and they are not alone. Most recently, 24 state regulators sent a letter to Congress urging leadership to allow state-chartered financial institutions to do business with CRBs.
Unfortunately, however, Senator Mike Crapo, chairman of the Senate Banking Committee, dealt a blow to this policy proposal. Specifically, Crapo said, “I cannot make a commitment as to whether we will take up legislation yet because we want to see how we can resolve this difference between criminal law and our financial law.”
Fortunately for ICBA, banking CRBs is only one of its 15 policy priorities for 2019. For those interested in reading more on ICBA’s other priorities, you may find them here.