As chairman of the Senate Banking Committee, I regularly hear from community banks and credit unions, especially those in Idaho, about how they have struggled to keep up with the ever-increasing regulation coming out of Washington. For years, senators on both sides of the aisle have been working to find consensus on how we can provide relief for smaller financial institutions from regulations that were meant for the biggest, most complex institutions, while also ensuring a safe financial system.
Financial institutions — of all sizes and forms — provide critical services in our communities. They help businesses manage operations, help entrepreneurs get funding to start their businesses, help families buy a home, help all of us save for our kids’ educations and help us deal with financial emergencies.
Unfortunately, these institutions’ operating landscape has changed dramatically over the past few years, and community banks and credit unions have struggled to keep up with the ever-increasing regulatory compliance and examiner demands coming out of Washington. For example, when the Simplot Credit Union wanted to start offering mortgage loans, it obtained all of the necessary education, compliance standards, certifications and licensing to do so, but increasingly burdensome mortgage regulations were implemented by Washington, and it had to make the difficult business decision to stop offering mortgage loans. When these banks have to stop offering products, it directly impacts the communities they serve.
After many hearings, bipartisan briefings, conversations among members and discussions with outside stakeholders, the Banking Committee crafted S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act. The bill was vetted by committee members, marked up through regular order and passed the full Senate by a vote of 67 to 31.
The bill recognizes that some of the compliance requirements on small banks are either unnecessary or do not reflect the difficulty that many community banks, especially in rural areas, face in complying with them. It simplifies regulations for community banks and credit unions, making it easier for them to do what they do best — serve their local communities by approving mortgages, providing credit and lending to small businesses. The bill also ensures that key consumer protections remain in place, and offers a wide array of protections for veterans, student borrowers, senior citizens and victims of fraud.
This bill has received widespread support from commentators, regulators, businesses and institutions representing millions of hard-working Americans and consumers, including over 10,000 community bankers, more than 100 million credit union consumer members, and thousands of small business owners and entrepreneurs, among others.
This bill is broadly supported for good reason. It was a bipartisan compromise, the changes are common sense, and it will allow financial institutions to better serve their customers and communities, while maintaining safety, soundness and important consumer protections. At a time of political polarization, we have proven that we can work together to get things done. This was not only an important showing of bipartisanship, but a major win for Main Street financial institutions and the communities they serve.
Crapo, a Republican, is Idaho’s senior U.S. senator.