Community banks like mine sorely need regulatory relief
You don’t need to be a community banker inside the beltway to know that partisanship and policymaking seem to go hand in hand in Washington these days. So, when an opportunity arises to enact meaningful reform — with the power to help my New Hampshire community bank and our customers — I can’t sit back and let the opportunity pass me by. Too much is at stake for my community and communities across the nation.
When the Economic Growth, Regulatory Relief and Consumer Protection Act cleared the Senate Banking Committee in December with strong bipartisan support, I was thrilled. It was a clear signal that our years-long effort to push back against the unyielding barrage of regulations had not been in vain. And that a much-needed reprieve for Ledyard National Bank and thousands of other community banks — whose footprint and small business lending surpass their larger counterparts — was finally within reach.
For far too long we’ve been sidetracked by the ever-increasing federal regulations that have raised compliance costs, reduced local credit availability and played an important role in the decline of de novo formation and consolidation within our industry, increasing systemic risk while reducing consumer choice.
With the legislation set to be brought to the Senate floor this week, Congress will have the opportunity to support community banks and the communities they serve so that we can return to relationship-based lending and help bolster our nation’s economic resurgence. By reforming overly complex regulations on community bank mortgage lending, for example, my staff can focus on the needs of our borrowers rather than the mounds of regulatory paperwork meant to rein in Wall Street’s excesses.
Tailoring rules to the size and risk profile of regulated institutions will not only ease the burden on local institutions and reduce the pressures that are stifling our ability to serve our customers, it will also help preserve our diverse and decentralized banking system.
Since the financial crisis, both political parties have constantly voiced support for regulatory relief for the nation’s community banks. Now our elected officials, including my New Hampshire senators, Democrats Maggie Hassan and Jeanne Shaheen, have a chance to support our community banking industry with action. Now they can demonstrate a rare bipartisan show of unity and stand with community banks like Ledyard National, which provide seed money to job-creating small businesses.
There are community banks in every congressional district, serving as an indispensable source of credit for thousands of urban, suburban and rural communities.
While it isn’t a panacea to overzealous regulation, the bipartisan regulatory relief package soon awaiting a Senate vote is a great place to start. It would ensure appropriate oversight of the largest financial firms while providing more flexible rules for local banks that pose no systemic threat.
By igniting the economic power of community banks, lawmakers will be encouraging access to financial services that puts customers first and helps local economies remain viable.