Public Affairs Update | By Stephen W. Rice
In late April, community bankers from throughout New York brought our message and our federal issues agenda to our nation’s capital for meetings with Sen. Chuck Schumer, members of our New York Congressional Delegation (including senior members of the House Financial Services Committee) and aides to Sen. Kirsten Gillibrand.
We also heard from FDIC Chairman Martin Gruenberg, Comptroller of the Currency Thomas Curry Consumer Financial Protection Bureau Director Richard Cordray and senior representatives from the Federal Reserve.
Our purpose: To urge support for reasonable regulatory relief for community banks, including tiered regulation proportionate to our smaller size, lower risk profile and traditional business model. Nationwide, community banks endured a record-setting cost burden of $981 million to manage regulatory burden and changes, with the average cost per community bank of $154,000 and 2,265 employee hours. In 2015 alone, there were 329 new regulatory changes, and 9,789 new pages to read. Large banks have the resources to more easily absorb this burden. Community banks need regulatory relief to support the credit needs of their customers, serve their communities and contribute to their local economies. It is increasingly difficult to do so when we must spend time, effort and dollars complying with added regulatory burden.
We also discussed data security and fraud, data breaches and our belief that data protection must be a shared responsibility, that all participants (including the retailers whose systems are breached), and that retailers should be held to the same rigorous data security as banks.
We also reiterated our position regarding credit unions. Congress established the industry in the 1930s to provide small-dollar loans to persons of modest means – those with a “common bond” – and granted them a tax exemption to do so. Today, many of the larger credit unions have long since outgrown that original mandate and mission, and operate essentially like banks. More than 200 credit unions have over $1 billion in assets – including in New York, where they compete directly with much smaller community banks. They continue to seek expanded powers and authorities, yet they continue to enjoy their tax exemption and are not subject to any CRA oversight or requirements.
We also talked about mortgage lending reform, improving the structure, accountability and governance of the CFPB, the Financial Accounting Standards Board’s Current Expected Credit Loss Model, the tax-advantaged Farm Credit System, improving the ability of community banks to raise capital and a number of other important priorities for the industry.
In Washington, as in Albany, it is important for our public officials to hear from those directly impacted by their actions and initiatives. IBANYS looks forward to representing the interests of New York’s community bankers in both capitals.■
Steve Rice coordinates government relations and communications for the Independent Bankers Association of New York State. He has worked in the New York banking industry and New York state government for more than three decades.