ABA Letter Details Negative Impact of Financial Reform Bill on Community Banks

WASHINGTON – The American Bankers Association sent a letter today to the members of the United States Senate asking them to consider the impact that regulations contained in the financial regulatory reform bill would have on community banks.  The letter, signed by Edward L. Yingling, ABA president and chief executive officer, lists 27 specific new and expanded regulations that the Restoring American Financial Stability Act (S. 3217) would impose on community banks, undermining their ability to support economic growth and recovery.  

“As many Senators have noted in recent months, community banks had nothing to do with causing the financial crisis,” states Yingling in the letter.  However, S. 3217 would add these 27 new or expanded types of regulation to the already crushing regulatory burden that community banks face, a burden that is “a threat to the future of community banks.”

Attached to the letter is the list of identified regulatory burdens that the bill would add or impose.  These include things such as new disclosure requirements, detailed requirements on collecting and reporting data on deposits, new data collection and reporting requirements for small business loans, and a series of requirements on compensation practices.

The letter makes clear that ABA does not oppose all of the new regulations, and Yingling notes that some are needed to respond to the crisis.  However, he also points out that many of the regulations “have nothing to do with the financial crisis,” and “some of them would result in a huge new expense to community banks.”  

For a copy of the letter click here.

For a copy of the attachment to the letter click here.

The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two million employees. The majority of ABA’s members are banks with less than $165 million in assets.

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