CBAI Community Bankers Meet with New CFPB Director Kathy Kraninger

A delegation of CBAI community bankers from around the state met with the new CFPB Director Kathy Kraninger in Chicago on February 5, 2019. The meeting was the latest of CBAI member meetings with leaders of the Bureau, having met previously with Directors Elizabeth Warren and Richard Cordray.

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The session was an important listening opportunity for the new Director as she was very interested in learning about any and all issues relating to community banking and the CFPB. The broader discussion with the Director emphasized how overly complex rules are an unnecessary and unwarranted regulatory burden on community banks, particularly because community banks do not engage in the conduct or cause the harm that many of the rules are designed to prevent. The delegation emphasized that the negative impact of complex, burdensome rules on community banks adversely affects customers’ access to credit and deposit services by forcing community banks to limit offerings or exit markets, thus reducing consumer choice.

CBAI and community bankers have consistently urged the Bureau to use Section 1022 of the Dodd-Frank Act which states, “The Bureau, by rule, may conditionally or unconditionally exempt any class of covered persons, service providers, or consumer financial products or services” from their rulemaking. It is clearly Congressional intent for the Bureau to have and use this authority to exempt community banks from much of its rulemaking. While some modest exemptions/thresholds have been set in the past, these have been too narrowly focused, and the volumes set too low. The Bureau’s expand use of this statutory authority will allow community banks to better serve their customers and communities.

The CBAI member delegation also commented on specific issues including: TRID and underwriting requirements under ATR/QM that need to be modified; HMDA and why higher exemptions for open and closed-end mortgages and modifications to the reporting of data are needed to relieve the regulatory burden on community banks; the need to foster sustainable small-dollar lending products that can be offered by community banks; and based on the outstanding performance of community banks in small business lending, clearly they are not violating fair lending laws and deserve a broad exemption from the regulatory burden of upcoming rules on small business data collection.

CBAI community bankers appreciated this opportunity to inform the Bureau on these issues and look forward to a continuing conversation with the CFPB.


CBAI Urges Deposit Insurance Approvals for De Novo Community Banks

In a February 4, 2019 comment letter, the Community Bankers Association of Illinois (CBAI) urged the Federal Deposit Insurance Corporation (FDIC) to approve many more applications for deposit insurance for community banks. CBAI highlighted its years-long support for de novos and recounted its past frustrations and disappointment that since the financial crisis so few applications for deposit insurance have been approved by the FDIC. Newly chartered community banks are needed to maintain a growing, evolving and vibrant banking profession. Read CBAI Comment Letter.


CBAI Draws National Attention for Supporting the Federal Reserve in Payments System Improvements

The Community Bankers Association of Illinois (CBAI) and CBAI Payments Task Force Chairman, Mark Field (Chairman and President of Liberty Bank in Liberty, IL) were highlighted in a January 29th Forbes article for strongly supporting the Federal Reserve’s proposal to operate a real time payments system.

Chairman Field challenged the notion that the largest banks in the country should own and control the payments system. CBAI concurred with Field and stated the Fed is uniquely situated to provide open and fair access to the payments system for all community banks regardless of size, charter type or location; and cautioned that a payments system that disadvantages community banks will have a devastating impact on the nation’s consumers, small business and agriculture. Read Forbes Article.


USDA Reopening FSA Offices Today

The Agriculture Department stated it will reopen all Farm Service Agency offices starting today to provide additional administrative services to farmers and ranchers during the lapse in federal funding. While certain FSA offices have been providing limited services since last Friday, all offices will open and offer a longer list of transactions starting today. 


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CBAI Urges Meaningful Call Report Relief

In a comment letter dated January 17, 2019, CBAI urged the OCC, Federal Reserve and FDIC to finally provide meaningful Call Report regulatory relief to community banks. The letter highlighted CBAI’s efforts to win relief in 2014, 2016 and 2017, which unfortunately received an insufficient response. Finally, in 2018, Congress enacted the bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) which included requiring the regulators to issue additional regulations for a meaningful reduction in these reporting requirements. CBAI again urged the Agencies to only require the Balance Sheet, Income Statement and Changes in Bank Equity Capital in a new short-form Call Report for covered depository institutions [less than $5 billion in total consolidated assets] for the first and third quarters of a year. Read Comment Letter.