Community banks and credit unions are vigilant about potential
unintended consequences related to regulatory proposals aimed at addressing
financial stability and financial criminals that may impact their businesses.
Below are a few of the latest advocacy initiatives pushed by
trade associations representing some of the nation’s depository institutions.
ABA, BPI call for revisions to Basel III mortgage
provisions
The American Bankers Association and the Bank Policy
Institute described revisions to the federal regulators’ Basel III endgame
capital proposal concerning its treatment of mortgage loans. In a joint letter,
the trade groups argued the proposed rule would impose significant costs on the
U.S. economy, affecting small business loans and the pricing of derivatives
that allow businesses to hedge their risks. They further asserted banking
agencies dramatically underestimated the consequences of their proposal and
failed to weigh the costs and benefits of the proposed changes. Read more about
their take on the proposed treatment of risk-weighted capital and more here.
ICBA, ACU support FinCEN crypto mixer proposal
Trade groups representing community banks and credit unions wrote
in support of the U.S. Treasury’s Financial Crimes Enforcement Network’s
(FinCEN) notice of proposed rulemaking requiring financial institutions to
maintain certain recordkeeping and reporting requirements relating to
transactions involving convertible virtual currency mixing. Specifically, the proposal
seeks to address the money laundering risk associated with cryptocurrencies. The
Independent Community Bankers of America (ICBA) and America’s Credit Unions
(ACU) wrote separate letters urging FinCEN to tailor the rule to take a stronger
approach targeted directly at the source of the problem: the cryptocurrency
industry. Read more about what ICBA
and ACU
had to say on the matter.
Community banks endorse bill to close ILC loophole
The Independence Community Bankers of America (ICBA) and
several state community banking associations wrote in support of the “Close the
Shadow Banking Loophole Act” (S. 3538), introduced by Senate Banking Committee
Chairman Sherrod Brown (D-Ohio) and Sen. John Kennedy (R-La.). The bill would
require companies that acquire an industrial loan company to adhere to the same
consolidated supervision by the Federal Reserve as other bank-holding companies.
The trade groups argue doing so would prevent large commercial firms from
exploiting a regulatory loophole to access the federally-insured deposit
insurance safety net without equivalent oversight and supervision. The full
letter is available here.
Survey says community bank leaders plan to grow in 2024
Nearly half of community bank leaders are somewhat, fairly
or completely confident about their bank’s prospects for revenue growth over
the next 12 months, according to survey released by the American Bankers
Association on community bank CEO priorities for this year. The survey results
indicate most respondents felt confident about the economy – both nationally
and locally. Nearly 49 percent said they also were confident about their bank’s
prospects. Of those respondents, nearly 61 percent indicated plans to expand
organically within current markets. Almost 53 percent said they planned to implement
new technologies to reduce operating costs and 45 percent plan to introduce new
products or services for consumers or commercial clients. More survey findings
are available here.