Senate to Consider Bipartisan Banking Reform Bill
‘Today, the Senate will vote to begin consideration of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act. This bill recognizes a simple truth: Small community banks and main-street credit unions are not the same as the multi-trillion-dollar banks on Wall Street. A simple enough observation, but at present, our laws fail to account for it.’
WASHINGTON, D.C. – U.S. Senate Majority Leader Mitch McConnell (R-KY) delivered the following remarks today on the Senate floor regarding the Economic Growth, Regulatory Relief, and Consumer Protection Act:
“Today, the Senate will vote to begin consideration of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act. This bill recognizes a simple truth: Small community banks and main-street credit unions are not the same as the multi-trillion-dollar banks on Wall Street. A simple enough observation, but at present, our laws fail to account for it.
“Since Washington imposed the Dodd-Frank financial regulations back in 2010, small-scale lenders have been subjected to a litany of new regulatory, compliance, and examiner demands that were designed with the country’s largest banks in mind. Dodd-Frank’s enormous regulatory burden has been inefficient and unhelpful for financial institutions of all sizes. But it has hit Main Street lenders especially hard.
“Many small banks have had to hire additional staff and expend additional resources solely to deal with the staggering compliance burden. According to a survey conducted last year, community bank compliance costs have risen to an average of 24% of net income.This regulatory burden crowds out the capital that is available to American families and small businesses, especially in rural communities.
“According to researchers at the Harvard Kennedy School, community banks provide over 50 percent of all small business loans, and nearly 80 percent of agricultural loans. In Kentucky, for example, there are more than 100 community banks and more than 20 credit unions. Many of them are the only financial institutions present in rural and underserved communities.
“But while Dodd-Frank supposedly took aim at ‘too-big-to-fail,’ in the first four years after it passed, the share of U.S. deposits in small banks shrunk by nearly a quarter. That means less access to capital for young couples looking to purchase their first home. Less credit for aspiring small business owners who needed help turning dreams into reality. Fewer options for farmers and ranchers hoping to expand.
“The bill before us this week will continue to unwind the damage caused by an administration and Democrat-run Congress that kept its foot firmly on the brake of the American economy. This is a modest but critical bill. By streamlining regulations, it will bring relief to the small financial institutions who have been hurt by Dodd-Frank’s one-size-fits-all approach.
“In a certain respect, this bill is a perfect complement to tax reform – further expanding opportunities for American families, communities, and small businesses. It is the product of years of work and a robust committee process. It is a truly bipartisan bill, cosponsored by an equal number of Republicans and Democrats or independents.
“Senators had, and still have, a wide diversity of views on Dodd-Frank. But there is widespread agreement that we should not continue allowing this unintended consequence to wreak havoc on community banks and small credit unions. I hope that, soon, we can turn that consensus into law.”
Related Issues: Economy, Regulations