Proportionate approach to banking regulation wins out in U.S. Sentate vote
>> Learn more: About proportionality
>> Read: ICBA press release
Washington, D.C, March 14, 2018 – WSBI member Independent Community Bankers of America®(ICBA), the leading proponent of community bank regulatory relief in the United States, today thanked the U.S. Senate for passing pro-community bank legislation and urged the U.S. House House of Representatives to advance needed relief immediately. The bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) would bolster local economic and job growth by providing much-needed relief to Main Street community banks.
“S. 2155 includes common-sense regulatory relief for our nation’s nearly 5,700 community banks while preserving vital consumer protections and effective regulatory supervision,” ICBA President and CEO Camden R. Fine said. “ICBA thanks the many senators who supported this bipartisan legislation as well as the House for already passing numerous regulatory relief bills included in S. 2155.”
S. 2155 includes numerous provisions from ICBA’s pro-growth Plan for Prosperity platform to:
provide “qualified mortgage” status for portfolio mortgage loans at most community banks,
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 certain well-rated community banks,
expand eligibility for the 18-month regulatory exam cycle to more community banks,
ease appraisal requirements to facilitate mortgage credit in local, rural communities,
exempt most community banks from the Volcker Rule,
exempt community banks that make 500 or fewer mortgages per year from the Consumer Financial Protection Bureau’s new, additional HMDA reporting requirements,
expand access to the Federal Reserve’s Small Bank Holding Company Policy Statement to help more community banks build capital,
allow federal savings associations with $20 billion or less in assets to elect to operate with national bank powers,
improve regulatory treatment of reciprocal deposits and certain municipal securities, and
provide relief for larger community banks, including higher asset thresholds for systemically important financial institution designations, and easing of stress testing and formal risk committee requirements.
“S. 2155 is a robust package of community bank regulatory relief focused on Main Street, not Wall Street,” said ICBA Chairman Scott Heitkamp, president and CEO of ValueBank Texas in Corpus Christi. “This legislation has strong bipartisan support for good reason—it will ease unnecessary regulatory burdens on community banks so they can continue meeting the needs of their customers and communities.”
Notably, S. 2155 has the Trump administration’s full support and would be signed into law upon passage in the House. As noted in its State of Administration Policy, the legislation builds on numerous common-sense regulatory relief bills already passed by the House, including the ICBA-advocated CLEAR Relief Act (H.R. 2133), Portfolio Lending and Mortgage Access Act (H.R. 2226), Securing Access to Affordable Mortgages Act (H.R. 3221), and more.
For a comprehensive look at ICBA and community banker advocacy on behalf of this legislation, visit ICBA’s “Support S. 2155, Support Community Banks” webpage. For more information on what’s in S. 2155, view ICBA’s summary of the bill’s key provisions by asset size.
The Independent Community Bankers of America®, the nation’s voice for nearly 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.
As acknowledged by U.S., European, and international legislative bodies and standard setters like the the Basel Committee (in its core principles for effective banking supervision, Principle 8), the proportionality principle is an instrument that aims to achieve the right balance between the objectives pursued by legislation and the methods used to achieve them. This balance must be ensured in order to prevent the financial system and its regulatory framework from creating disproportionate obligations to banks that do not adjust to the standards of size, complexity, business model, and cross-border activity; banks that due to their low-risk business model constitute stabilising factors in the financial system.
In Europe, ESBG Members have contributed, through the ESBG Task Force on Proportionality, to the "Application" section of the paper, providing concrete examples of where the principle of proportionality could be applied. The topics selected in this section are supervisory reporting, liquidity, external models, leverage ratio, corporate governance, and general retail banking.
>> Learn more: About proportionality