WASHINGTON, D.C. – In advance of a Senate Banking, Housing and Urban Affairs Committee Hearing next week on the state of small banks in the United States, U.S. Senators Angus King (I-Maine) and Deb Fischer (R-Neb.) today urged Committee Chairman, Senator Tim Johnson (D-S.D.), and Ranking Member, Senator Mike Crapo (R-Idaho), to provide relief to America’s community banks struggling under the weight of shortsighted regulations. King and Fischer are authors of the RELIEVE Act, legislation to provide immediate regulatory relief to America’s small financial institutions, like community banks and credit unions, that will help them to better serve their communities.

“We wish to express our support for the need to provide regulatory relief to America’s community banks. …As you know, these financial institutions are vital to our communities: they provide access to credit for small businesses, work with borrowers who have special housing needs with properties that don’t fit conventional financing, and bolster local economies,” Senators King and Fischer wrote. “As a result of increasing regulatory burdens, mergers and consolidations have increased, new charter activity has come to a virtual standstill; and community banks’ share of total industry assets have declined. We believe this heightened regulatory environment impedes banks’ ability to be strong sources of credit for their customers, especially in rural and undeserved areas. …Without immediate relief for community banks to reduce the current regulatory burden, unhealthy consolidation of the banking industry may occur at a rapid rate.”

Next Tuesday, September 16^th, the Senate Committee on Banking, Housing and Urban Affairs will hold a hearing entitled, “Examining the State of Small Depository Institutions.”

In July, Senators King and Fischer, along with Senators Mark Warner (D-Va.) and Jon Tester (D-Mont.), introduced the RELIEVE Act to aid smaller financial institutions struggling with onerous regulations. The bill would help lift the regulatory burden by modernizing outdated regulations, making technical corrections to the Dodd-Frank Act, and providing parity for credit unions with regard to insurance coverage of lawyer trust accounts and other escrow accounts. It’s supported by the U.S. Chamber of Commerce, the American Bankers Association, and the Credit Union National Association.

The complete text of Senator King’s and Senator Fischer’s letter is below:

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September 10, 2014

The Honorable Tim Johnson                                             The Honorable Mike Crapo

Chairman                                                                           Ranking Member

Committee on Banking, Housing, and                              Committee on Banking, Housing, and

Urban Affairs                                                                     Urban Affairs

United States Senate                                                          United States Senate

534 Dirksen Senate Office Building                                  534 Dirksen Senate Office Building

Washington, D.C. 20510                                                    Washington, D.C. 20510

Dear Chairman Johnson and Ranking Member Crapo,

As the U.S. Senate Banking, Housing, and Urban Development Committee prepares to hold a hearing in September, we wish to express our support for the need to provide significant regulatory relief to America’s community banks.

In the aftermath of the financial crisis, we agree it is very important to determine the state of community banking in the United States. As you know, these financial institutions are vital to our communities: they provide access to credit for small businesses, work with borrowers who have special housing needs with properties that don’t fit conventional financing, and bolster local economies. As a result of increasing regulatory burdens, mergers and consolidations have increased; new charter activity has come to a virtual standstill; and community banks’ share of total industry assets has declined. We believe this heightened regulatory environment impedes banks’ ability to be strong sources of credit to their customers, especially in rural and underserved areas.

Stories of frustration from our local bankers – countless examples of burgeoning compliance staffs, onerous examinations, and the loss of valuable resources as the burden of managing regulatory responsibilities continues to increase – must be taken seriously. Without immediate relief for community banks to reduce the current regulatory burden, unhealthy consolidation of the banking industry in the United States may occur at a rapid rate. 

We thank you for holding this hearing and urge you to markup legislation to identify and reduce the regulatory policies that restrain community bank lending and local economic growth.

Sincerely,

Angus S. King, Jr.                                                                                                           Deb Fischer

United States Senator                                                                                        United States Senator

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