Pushing for Prosperity


ICBA’s regulatory relief plan making headway in 114th Congress

By Paul Merski

The ICBA push for community bank regulatory relief is off to a promising start in the 114th Congress. Lawmakers in both legislative chambers and political parties have taken a keen interest in reining in community bank overregulation to help consumers and support economic growth. And ICBA has given them plenty of opportunities to make a difference with our Plan for Prosperity, the heart and soul of our regulatory relief effort on Capitol Hill.

The Plan for Prosperity (www.icba.org/PFP2015) is a flexible set of policy priorities that can be quickly adopted as legislation to ease burdens on community banks and thrifts so they can help their communities prosper. With Congress advancing key legislation to implement the plan, regulatory relief is on the move.

Setting the table

In the first leg of the new Congress, the House Financial Services Committee has moved quickly to introduce and advance Plan for Prosperity legislation. A robust bill that embodies what’s in the plan is the CLEAR Relief Act (H.R. 1233) introduced by Rep. Blaine Luetkemeyer, (R-Mo.), a former community banker and the chairman of the House Subcommittee on Housing and Insurance.

The legislation includes reforms to federal mortgage regulations, call report and privacy-notice requirements, and capital guidelines to promote regulations tiered to the size and complexity of regulated institutions. Similar legislation is also advancing in the Senate. ICBA and community bankers are pushing hard to advance the legislation and its provisions, which was a central plank in ICBA’s just-wrapped Washington Policy Summit.

Just as important is a separate House measure introduced by another subcommittee chairman, Scott Garrett R-N.J., designed to help community banks create, attract and preserve capital. The Community Bank Access to Capital Act (H.R. 1523) would exempt community banks from the Basel III capital rules and increase the beneficial Small Bank Holding Company Policy Statement qualifying asset threshold from $1 billion to $5 billion. Other provisions would expand Sarbanes-Oxley Act exemptions and allow thrift holding companies to use the Securities and Exchange Commission’s new deregistration and registration thresholds. These reforms would strengthen community bank viability and expand access to capital in local communities.

Moving ahead

While these major bills are still in motion, the House Financial Services Committee completed its first round of advancing regulatory relief with a package of smaller Plan for Prosperity bills. Following ICBA testimony on the consumer impact of overregulation, the panel marked up legislation to exempt community bank portfolio loans from Consumer Financial Protection Bureau escrow requirements, to delay and study Basel III rules on mortgage-servicing assets and to eliminate redundant privacy notice requirements, among other bills. At press time, the Senate Banking Committee was expected to follow suit with its own regulatory relief markup, and we expect the momentum to continue building following ICBA’s policy summit.

Clearly, lawmakers are hearing the call from community bankers. In the opening months of the 114th Congress, Capitol Hill has already taken several critical steps in advancing regulatory relief. But we must continue working to ensure Congress keeps it up.

Prosperity is at the heart of our legislative push, and recent developments give promise to community banks and the customers and communities they serve.

Paul Merski (paul.merski@icba.org) is ICBA’s executive vice president of congressional relations and chief economist.