A Plan for Prosperity

Hundreds of community bankers will rally in Washington for regulatory relief

By Paul Merski

About 1,000 community bankers and industry allies will gather in Washington this month to lobby lawmakers during the 2013 ICBA Washington Policy Summit. The April 24–25 fly-in gives community bankers nationwide an ideal opportunity to press their congressional representatives and regulators on ICBA’s Plan for Prosperity regulatory-relief platform. If you’re still familiarizing yourself with the plan, here are the basics.

What is the PFP?

The Plan for Prosperity (PFP) is ICBA’s newly launched policy platform to enact regulatory relief for the nation’s community banks and thrifts in the 113th Congress. Rather than promote a massive, single bill, the plan sets forth a set of flexible legislative priorities that will draw the most bipartisan support in Congress to drive through the demanding legislative process.

The thrust of the PFP platform is focused on priority community bank-friendly regulatory relief measures that will better allow community banks to focus on their business versus onerous regulatory burdens. The multipronged proposal is designed to reduce excessive regulation while supporting greater regulator accountability to help community banks stay focused on their mission—promoting economic growth in their communities. Its most noted reforms will improve Consumer Financial Protection Bureau’s governance; reduce over-restrictive mortgage lending rules; increase examiner accountability to curb harsh bank exams; curb auditing expenses and redundant privacy notices; and expand capital-raising opportunities for community banks, thrifts and mutuals.

What are its chances?

Here’s the good news: The 113th Congress is interested in community bank regulatory relief, and several provisions in the plan are already introduced and moving through the process. Specifically, PFP bills have been introduced to exempt community banks from proposed municipal advisor regulations, offer relief from redundant privacy notice requirements, reform the CFPB’s structure and apply new Securities and Exchange Commission deregistration thresholds to thrifts. So the timing of community bankers ICBA fly-in and direct lobbying can only help advance these and other important PFP measures.

Meanwhile, ICBA is prepared to add to the platform items as necessary to address any newly implemented adverse regulatory rules or changes in the congressional environment. For example, if Basel III final rules on regulatory capital are unduly onerous for community banks, ICBA is well prepared to update its plan and pursue legislative reforms from Congress.

So what’s next?

ICBA will continue working with lawmakers, community bankers and its affiliated state and regional community banking associations to push these PFP proposals through Congress. However, community bankers’ grassroots advocacy is the key to success. ICBA can tee up these regulatory relief measures, but it will take direct community banker advocacy with lawmakers to achieve success.

Advocacy can no longer be a reactionary response from our industry. If community banks are going to be able to continue serving their customers and communities, our industry must be fully engaged. We must create and maintain mutually beneficial relationships with policymakers and, like any relationship, be productive and active participants.

We are not demanding needed regulatory relief for its own sake. Rather community bankers must convey to lawmakers what it means for their ability to better serve their customers and foster economic growth, job creation and communitywide prosperity. That is why all community bankers—whether they’re in the corner office, in the boardroom or on the front service lines—should be familiar with the Plan for Prosperity and press their members of Congress to see it through.

How can I help?

Here’s more good news: ICBA offers plenty of resources to help community bankers make the case with their lawmakers for the Plan for Prosperity and regulatory relief. Visit ICBA’s “Be Heard” and take a little time to familiarize yourself with the tools available. The site offers the latest advocacy updates on pressing community bank issues and information on how to connect easily with lawmakers, including key congressional staff and social media links.

To truly make progress on the reforms that will allow the community banking industry to continue serving Main Street, our industry needs to focus on advocacy anew. Advocacy has to be as integral to our industry’s daily operations, as fundamental as taking deposits and making loans.

So while the community bankers at this month’s Washington Policy Summit will spend an important couple of days meeting face to face with lawmakers, laws are typically not made in a couple of days. A constant drumbeat of advocacy, of engagement from across the country, is necessary to preserve our industry’s future and help our communities prosper. endmark

Paul Merskiis ICBA executive vice president of congressional relations and chief economist.