Major banking groups are uniting behind a call for regulatory relief from Congress.
In a letter sent to the top members of the Senate Banking Committee dated Wednesday, four trade associations warned that “meaningful relief is critical” and called for legislation to lower regulatory burdens.
“The growing volume and complexity of regulations is driving the decline in community financial institutions and their ability to best serve the needs of their customers and to generate local economic activity and jobs,” the letter reads. “Remaining community financial institutions are forced to hire new compliance staff, instead of loan officers, and to adjust or eliminate the type of services that they can provide in their communities.”
The American Bankers Association, the Credit Union National Association, the Independent Community Bankers of America and the National Association of Federal Credit Unions jointly wrote the letter.
Together, they say they represent nearly 14,000 institutions, including small banks and credit unions that are often at odds in their legislative demands.
The letter identified a sweeping banking reform package written by Senate Banking Committee Chairman Richard Shelby, R-Ala., as a “step in the right direction.”
That bill would lessen the new burdens placed on small banks, an effort with broad bipartisan support. But it also would make significant changes to the overall financial regulatory architecture of the country, including to the Federal Reserve, the new tools given to regulators to identify non-banks that could threaten the financial system in a failure, the bailed-out mortgage firms Fannie Mae and Freddie Mac, and much more.
Shelby’s legislation cleared the committee in May on a party-line vote, lacking the Democratic support to clear the Senate.
More recently, Shelby also attached the reform package to an appropriations bill for financial services.
Experts and lobbyists expect that some or all of the bill could be included in a must-pass bill to keep the government open. Government funding runs out at the end of the month.
The Obama administration has opposed attaching any financial regulatory roll-backs to government funding legislation. Congressional critics of Wall Street are on the alert for such a maneuver, after a provision undoing one measure of the 2010 Dodd-Frank reform law was included in a spending bill late last year.
The letter sent Wednesday called on lawmakers to avoid “rhetoric” standing in the way of reform and said that a bipartisan deal on legislation is “imperative.”
