ICBA to Congress: Excessive Regulation Harms Consumers

by PaymentsJournal 0

Washington, D.C. (March 28, 2017)—The Independent Community Bankers of America® (ICBA)today told Congress that the nation’s economy and consumers would fare betterif policymakers address overly burdensome community bank regulations.Testifying before the House Financial Services Committee’s Subcommittee onFinancial Institutions and Consumer Credit, ICBA Chairman R. Scott Heitkampsaid excessive regulations are limiting access to credit for many Americans andinhibiting the economic recovery.

“Simply put, regulatory overkill is cuttingoff access to credit for credit-worthy borrowers,” said Heitkamp president andCEO of ValueBank Texas in Corpus Christi, Texas. “The expense and distractionof regulatory compliance divert scarce funding and management resources from communitylending—particularly for those marginal borrowers whose applications warrantcloser review and a greater capacity for risk.”

Heitkamp noted that community banks areoutsized lenders due to their first-hand knowledge of borrowers and localcommunities, though he cited examples of credit-worthy borrowers who have beendirectly harmed by regulatory lending restrictions. For instance, customers whorelocate for a new job or small-business owners who cannot comply withincome-documentation requirements are being denied mortgage loans because offederal ability-to-repay rules.

Fortunately, there are many readily availablelegislative solutions to community bank overregulation and its negativeeconomic impact, Heitkamp said. ICBA’s pro-growth Planfor Prosperity platform contains nearly 40 separate legislativerecommendations to alleviate excessive burdens and promote lending whilepreserving consumer protections.

“Despite some recent, positive news on thestate of bank lending, now is not the time to be complacent,” Heitkamp said.“We strongly encourage this committee to complete the work that was begun inthe last Congress and enact meaningful regulatory relief for community banks.”

About ICBA
The Independent Community Bankers of America®, the nation’s voice for morethan 5,800 community banks of all sizes and charter types, is dedicatedexclusively to representing the interests of the community banking industry andits membership through effective advocacy, best-in-class education andhigh-quality products and services. For more information, visit ICBA’s websiteat www.icba.org.

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