The Independent Community Bankers of America urged Congress on Tuesday to support the Community Lending Enhancement and Regulatory Relief Act to relieve the regulatory burden on community institutions.
“In order to reach their full potential as catalysts for entrepreneurship, economic growth and job creation, community banks must have regulation that is calibrated to their size, lower-risk profile and traditional business model,” B. Doyle Mitchell, the president and CEO of ICBA member Industrial Bank in Washington, D.C., said, adding that extending the mandatory compliance date for the CFPB’s mortgage rules is among the ICBA’s top goals.
The CLEAR Relief Act is designed to exempt community bank mortgages from new escrow requirements, provide qualified mortgage status to community bank portfolio loans, eliminate duplicative privacy notice mandates, exempt smaller mortgages from new appraisal standards and relieve institutions from certain accounting and auditing expenses.
“Left unaddressed, the increasing burden of regulation will discourage the chartering of new community banks and lead to further industry consolidation,” Mitchell said. “Consolidation will lead to higher loan interest rates for borrowers, lower rates paid on deposits and fewer product choices. A more concentrated industry, dominated by a small number of too-big-to-fail banks, will jeopardize the safety and soundness of the financial system and expose taxpayers to the risk of additional costly bailouts.”