U.S. House Passes Highway and Transportation Funding Bill Without Harmful Federal Reserve Stock Dividend Cut

The United States House of Representatives approved the highway and transportation funding legislation with two CBAI and ICBA-advocated amendments blocking a backdoor tax hike on members of the Federal Reserve System and advancing community bank regulatory relief. Following the vote, ICBA called on the House and Senate to include these amendments in any final highway and transportation legislation they send to the President.

An amendment from Congressmen Randy Neugebauer (R-TX) and Bill Huizenga (R-MI), which passed by a wide bi-partisan vote of 354-72, would remove a Senate-passed 75 percent cut to dividends paid on Federal Reserve Bank stock. CBAI thanks House members who voted in favor of the Neugebauer-Huizenga Amendment, including Illinois’ Mike Bost (R-12), Cheri Bustos (D-17), Danny Davis (D-07), Rodney Davis (R-13), Robert Dold (R-10), Tammy Duckworth (D-08), Bill Foster (D-11), Randy Hultgren (R-14), Robin Kelly (D-02), Adam Kinzinger (R-16), Darin LaHood (R-18), Dan Lipinski, (D-03), Mike Quigley (D-05), Peter Roskam (R-06), Jan Schakowsky (D-09), and John Shimkus (R-15). Illinois members Luis Gutierrez (D-04) voted “No’ and Bobby Rush (D-01) was “Not Voting”.

Another amendment, which was offered by House Financial Services Chairman Jeb Hensarling (R-TX) and passed on a voice vote, included 15 measures that already passed the House with broad bi-partisan support, included several provisions from ICBA’s Plan for Prosperity. Specifically, the Amendment included CBAI and ICBA support provisions to eliminate redundant privacy notice requirements, expand the 18-month exam cycle and allow thrift holding companies to take advantage of beneficial SEC registration thresholds.

The CBAI and ICBA-advocated amendments passed following strong grassroots efforts by community bankers, though their continued advocacy will be needed as the House and Senate work to resolve differences between their conflicting versions of the bills.

November 6, 2015


U.S. House Votes Overwhelmingly to Delay TRID Liability

The United States House of Representatives voted overwhelmingly (303 to 121) in favor of the Homebuyers Assistance Act (H.R. 3192), despite the threat of a Presidential veto. This legislation will provide a reasonable hold-harmless period for enforcement of the of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) regulation for those that make good-faith efforts to comply.

While CBAI appreciates the Bureau’s representation that it will be sensitive to the progress made by those institutions that make good-faith efforts to comply, at the same time, community banks needs more certainty that their good-faith efforts to comply will not expose them to harmful litigation.

CBAI thanks the following Illinois members of the House for voting in favor of this important legislation which now goes to the Senate for consideration - Mike Bost (R-12), Cheri Bustos (D-17), Rodney Davis (R-13), Robert Dold (R-10), Bill Foster (D-11), Randy Hultgren (R-14), Adam Kinzinger (R-16), Darin LaHood (R-18), Dan Lipinski, (D-03), Mike Quigley (D-05), Peter Roskam (R-06), and John Shimkus (R-15).

 October 7, 2015


Illinois Members of Congress Oppose Fed Reserve Bank Stock Dividend Cut

Illinois Congressman Bill Foster (D-11) is leading a bipartisan letter to leadership of the United States House of Representatives opposing a proposal that would reduce dividend payments on required Federal Reserve Bank stock by 75% until there is greater examination of the issue and an understanding of the implications of such a statutory change on the banking system. A total of 151 U.S. House members have signed this October 20, 2015 letter, including Illinois’ Randy Hultgren (R-14), Mike Quigley (D-05), Bob Dold (R-10), Danny Davis (D-07), Robin Kelly (D-02), and Rodney Davis (R-13). CBAI thanks Congressman Foster and the other co-signing members of the Illinois Congressional delegation for their leadership on this issue. Read Congressional Letter.

On October 9, 2015, CBAI joined a coalition of 43 state banking associations to express their opposition to the Fed dividend cut. Read Coalition Letter.


CBAI Participates in Chicago EGRPRA Outreach Meeting

CBAI’s Immediate Past Chairman, Todd Grayson, President of South Central Bank in Chicago, was a panelist at the October 19, 2015, Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) outreach meeting at the Federal Reserve Bank of Chicago. Grayson delivered the community bank message regarding overwhelming and counterproductive regulatory burden and the need for community bank regulatory relief and tiered regulation.

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The EGRPRA Act of 1996 requires that regulations prescribed by the Federal Financial Institutions Examination Council, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and Board of Governors of the Federal Reserve System be reviewed by the agencies at least once every 10 years. The purpose of this review is to identify outdated, unnecessary, or unduly burdensome regulations and consider how to reduce regulatory burden on insured depository institutions while, at the same time, ensuring their safety and soundness and the safety and soundness of the financial system. The Chicago Outreach Meeting was attended by approximately 120 bankers, community group members and regulators.

Grayson’s panel was one of four that made presentations to Martin J. Gruenberg (Chairman, FDIC), Thomas J. Curry (Comptroller, OCC), Lael Brainard (Governor, Federal Reserve Board), and Bryan A. Schneider (Secretary, Illinois Department of Financial and Professional Regulation). His panel discussions included Money Laundering and Safety and Soundness. He discussed the increasing cost of regulatory compliance and urged tiered regulation for community banks. Grayson’s specific recommendations included increasing the dollar threshold and revising other requirements for residential real estate appraisals, and he also recommended increasing the dollar threshold for Currency Transaction Reports (CTRs).

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CBAI’s Vice President of Governmental Relations, David Schroeder, also attended the Outreach Meeting. During Audience Comment periods, Schroeder cautioned about unintended consequences of the combined impact of multiple agency rulemaking to address the same perceived issue or concern (i.e., Basel III capital and risk weights, the proposed new FDIC assessments for community banks, and the upcoming FASB expected loss model all impacting commercial and real estate lending) and stated the need for de novo bank formation to maintain a strong, growing, evolving and vibrant banking profession 

CBAI thanks Todd Grayson for participating in this important Outreach Meeting and we certainly hope that this time the decennial review of regulations will produce prompt and meaningful regulatory relief for community banks.


Bernanke Confirms Reality of Too-Big-To-Jail

Former Federal Reserve Board Chairman Ben Bernanke has released a book, The Courage to Act: A Memoir of a Crisis and Its Aftermath, which is about his experiences at the center of the financial crisis in 2008 and 2009. In a broadcast interview regarding the book, Bernanke responded to the question, “Should somebody have gone to jail?” [regarding responsibility for the crisis] by saying unequivocally, “Yes, I think so.”

Bernanke went on to explain that the efforts of the Department of Justice have been to indict or threaten to indict financial firms. He noted that a "financial firm" can't be put in jail. Bernanke continued, “It would have been my preference to have more investigations of individual actions as obviously everything that went wrong or was illegal was done by some individual not by an abstract firm; and so in that respect there should have been more accountability at the individual level.”

This admission by the former Fed Chairman confirms the long held belief by CBAI and community bankers that the fundamental American constitutional right of ‘equal justice under the law’ is not applicable when it comes to the too-big-to-fail (TBTF) banks and financial firms. The United States apparently has a two-tiered system of justice – one for them and another for everyone else. While this confirming admission by the former Fed Chairman is gratifying, the problem of TBTF has not been solved and remains an enormous threat to our financial system, the economy, and American taxpayers and it must be addressed. The community bank position on TBTF is the right one – these financial behemoths have repeatedly proven they are too-big-to-manage, too-big-to-regulate, too-big-to-behave, too-big-to-prosecute, too-big-to- jail, and must be downsized. CBAI urges the current Fed Chair, Janet Yellen, her fellow banking regulators, and the Department of Justice to take greater leadership positions than have been taken in the past in assuring that equal justice is a truly a reality for all. 

October, 2015