ICBA to Congress: Regulation Threatens Small-Business Lending

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The exponential growth of federal regulation is leading to fewer community banks and threatening lending to small businesses, the Independent Community Bankers of America® (ICBA) told Congress.

Though community banks hold less than 20 percent of U.S. banking industry assets, we hold a disproportionate market share of small-business loans—55 percent—supporting a sector responsible for more job creation than any other.

ICBA to Congress: Regulation Threatens Small-Business Lending

Increasing burdens harm community bank partnership with nation’s leading job creators

The exponential growth of federal regulation is leading to fewer community banks and threatening lending to small businesses, the Independent Community Bankers of America® (ICBA) told Congress. Testifying before the House Small Business Committee’s Subcommittee on Economic Growth, Tax and Capital Access, third-generation community banker B. Doyle Mitchell Jr. said the growing regulatory burden is contributing to fewer charters for community banks, which are outsized lenders to the nation’s top job creators.

“Though community banks hold less than 20 percent of U.S. banking industry assets, we hold a disproportionate market share of small-business loans—55 percent—supporting a sector responsible for more job creation than any other,” said Mitchell, president and CEO of Industrial Bank in Washington, D.C. “A financial landscape with fewer, larger banks will reduce access to credit for small businesses. The good news is that there are readily available legislative solutions to this pending crisis.”

Mitchell—who said regulatory burden has contributed significantly to the decrease of 1,342 U.S. community banks since 2010—spotlighted several pending bills inspired by ICBA’s Plan for Prosperity platform that would reduce the regulatory burden restricting small-business access to credit. They include the:

  • CLEAR Relief Act (H.R. 1233), comprehensive legislation introduced by House Small Business Committee Vice Chairman Blaine Luetkemeyer with numerous regulatory-relief provisions,
  • Community Bank Access to Capital Act (H.R. 1523), introduced by Rep. Scott Garrett to enhance capital access and support local lending,
  • Portfolio Lending and Mortgage Access Act of 2015 (H.R. 1210), introduced by Rep. Andy Barr to provide Qualified Mortgage status to mortgage loans held in portfolio,
  • Community Institution Mortgage Relief Act (H.R. 1529), introduced by Rep. Brad Sherman to provide relief from excessive mortgage regulations,
  • Right to Lend Act (H.R. 1766), introduced by Rep. Robert Pittenger to repeal onerous small-business data-collection requirements,
  • Small Bank Exam Cycle Reform Act (H.R. 1553), introduced by Rep. Scott Tipton to allow highly rated community banks to use an 18-month exam cycle,
  • Financial Products Safety Commission Act (H.R. 1266), introduced by Rep. Randy Neugebauer to require the Consumer Financial Protection Bureau to be governed by a five-member commission, and
  • Financial Institutions Examination Fairness and Reform Act (H.R. 1941), introduced by Reps. Lynn Westmoreland and Carolyn Maloney to improve the oppressive examination environment by creating a workable appeals process.

About ICBA
The Independent Community Bankers of America®, the nation’s voice for more than 6,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit http://www.icba.org.

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Aleis Stokes
Independent Community Bankers of America
+1 (202) 821-4457
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since: 04/2011
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