Are government regulations choking community banks' ability to lend?
One would think so, given the latest list of top-level legislative priorities issued by the Independent Community Bankers of America, or ICBA, a Washington, D.C.-based trade group that represents nearly 7,000 local and regional banks.
The group wants to convince Congress to reduce the regulatory burden on community banks and thrifts to enable them to lend more robustly to local small businesses and residents and dedicate more of their resources to promoting economic growth, rather than regulatory compliance.
ICBA CEO Camden R. Fine said in a statement that Congress would be taking a step toward rebuilding the U.S. economy by relieving the nation's community banks from regulatory burdens.
"Reducing unnecessary and overly burdensome regulations is a smart and cost-free way to boost economic activity and job growth across the nation," Fine said.
The specific priorities on the ICBA's list include:
- Exempting community banks from certain mortgage reforms.
- Reducing annual privacy notice redundancies.
- Revising the Consumer Financial Protection Bureau.
- Improving accountability in bank exams.
- Offering relief from accounting and auditing expenses for publicly traded institutions.
- Supporting mutual banks with new charter and dividend rules.
- Requiring rigorous and quantitative justification of new government rules.
- Supporting additional capital for small bank holding companies.
- Cutting red tape in small-business lending.
The banking group characterized the increase in bank regulations in recent years as a "growing threat" to community banks and said regulation has a disproportionate impact on these companies because they don't have the size and resources to absorb the associated compliance costs.
Is the ICBA right? Does the CFPB need to be tweaked? Are community banks at a disadvantage?