Bipartisan bill aims to lessen community bank regs

Matt Morrow: Bill aligns with local goals for small-business growth.

Aiming to roll back regulations on community banks, the U.S. Senate passed the Economic Growth, Regulatory Relief and Consumer Protection Act on March 14.

The bipartisan bill S.2155 is sponsored by Sen. Mike Crapo, R-Idaho, with 26 co-sponsors including Sens. Roy Blunt and Claire McCaskill from Missouri. It would overhaul the Dodd-Frank Wall Street Reform and Consumer Protection Act. According to the bill, it would specifically amend the Truth in Lending Act, the Bank Holding Company Act of 1965 and United States Housing Act of 1937. The bill passed in the Senate with a vote of 67-31. The bill went to the U.S. House of Representatives March 15, however, was taken back to the Senate March 22 for additional hearings by the U.S. Senate Committee on Banking, Housing and Urban Affairs, according to online congressional records.

The bill will have to pass in the House and be signed by President Donald Trump before it becomes law.

Matt Morrow, president of the Springfield Area Chamber of Commerce, said the bill is key to local small-business growth and job creation, as it’s directly tethered to the finance availability from area banks.

“In the chamber’s federal legislative agenda for 2018, adopted by our board at the end of last year, we encouraged legislators to modify existing laws to improve access to capital, reduce regulatory burdens on community banks and to eliminate those elements that are unreasonably restrictive,” he said via email. “We are reaching out to members in the banking and financial industry now to gauge their reaction, as well.”

According to a news release from the Independent Community Bankers of America, the bill was endorsed by 43 community bank associations nationwide in a letter to the Senate, prior to its passing.

Springfield Business Journal reached out to three Queen City area banks, and all representatives declined to comment, noting officials were still unsure how the bill would directly affect consumers or financial institutions.

Dodd-Frank was signed into federal law by President Barack Obama in 2010, in response to the financial crisis of 2007-08. Dodd-Frank is a regulatory measure which affected all financial agencies along with the financial industry by adding more regulations on lending from large and small banking institutions. S.2155 is specifically aimed to waive some requirements for banks with less than $10 billion in assets. These waivers include ability-to-repay requirements for some residential-mortgage loans, while altering other mortgage lending provisions related to transaction waiting periods, appraisals, escrow requirements, mortgage data, manufactured homes and licensing of loan originators.

S.2155 exempts banks with assets less than $10 billion from the Volcker Rule, prohibiting banking agencies from taking part in proprietary trading or entering into some relationships with hedge funds and private-equity funds.

It aims to reduce inspection and environmental-review requirements for smaller rural public-housing agencies, and also would require credit reporting agencies to provide credit-freeze alerts and include consumer-credit provisions related to minors and veterans. It also would alter the Family Self-Sufficiency program, which provides employment and savings incentives for low-income families.

In a news release, the U.S. Chamber of Commerce also endorsed the bill.

“This legislation will bring a long-awaited respite to main-street businesses across America whose growth has been stifled in the post-crisis regulatory era,” said Thomas Donohue, U.S. Chamber president and CEO.