Dear Congress: Don’t drop the ball on reg relief

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There is plenty of room for optimism when it comes to the prospects for community bank regulatory relief in the near future.

Amid so much partisan rancor in Washington, it appears that supporting the nation’s community banks really is just about the only thing Republicans and Democrats alike can agree on.

The big break came, of course, with the Senate Banking Committee’s approval of bipartisan legislation to provide significant community bank regulatory relief. Following persistent outreach and leadership by community bankers, the panel voted 16-7 to send the bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act to the Senate floor, where it could come up for a vote as soon as next month.
Community bankers are used to seeing substantial regulatory reforms advance through committee, or even through the full House of Representatives. But these measures too often fail to achieve final passage because of the Senate’s stringent supermajority requirement.

This time is different.

The multipronged regulatory relief bill was driven by a bipartisan coalition of lawmakers, including Mike Crapo, R-Idaho, chairman of the Senate Banking Committee, and committee Democrats Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Jon Tester of Montana and Mark Warner of Virginia.

Not only was the legislation forged in bipartisanship, but it enjoys broad support in the Senate on both sides of the aisle. The bill has 20 original cosponsors, including five additional Democrats and Independent Sen. Angus King of Maine. A total of 11 Democrats have signed on to support the bill — indicating it has supermajority backing in the upper chamber.

The only question at this point is this: can the bill remain focused on community banks to maintain its broad backing?

The bipartisan allies on the Senate Banking Committee wisely resisted any changes to the bill — even those they supported — while marking it up on Dec. 5. This commitment to maintaining the bill’s focus on common-sense, popular relief for community banks will be essential in ensuring its passage through the full Senate.

This goes not just for poison-pill amendments that would expand, rather than roll back, excessive regulations—but also for attempts by the largest banks to extend the scope of relief to Wall Street. Community banks cannot let the megabanks jeopardize this vitally important legislation by getting their proverbial camel’s nose under the tent, which is why we’re advocating a clean bill in our continued outreach with lawmakers.

The legislation enjoys broad Senate support for good reason. It includes many growth-oriented policies from the Independent Community Banker of America’s “Plan for Prosperity” platform to ease unnecessary regulatory burdens and promote access to capital. For instance, the bill would increase exemptions from Home Mortgage Disclosure Act rules slated to take effect in January, expand the “qualified mortgage” definition for community bank loans held in portfolio, and simplify capital requirements, among many other pro-community bank provisions.

The committee’s successful bipartisan vote is a major step forward for the community banking industry’s years-long regulatory relief push. Community banks have shown that we can achieve a bipartisan vote despite an acrimonious political environment and fight off amendments that would distort and threaten the bill.

Now we must work with Congress to deliver the bill to the president’s desk to be signed into law. With the well-deserved bipartisan support that community banks enjoy on Capitol Hill, I have little doubt that we can clear this final hurdle.

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Regulatory relief Dodd-Frank HMDA Community banks Mike Crapo Senate Banking Committee