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Bipartisan and Bicameral Support for the CLEAR Act Grows!

August 15, 201461114

Bipartisan and bicameral support is growing for the Community Lending Enhancement and Regulatory Relief Act (CLEAR Relief Act of 2013, H.R. 1750/S. 1349) with Congresswoman Tammy Duckworth (D-8th) recently cosponsoring this important legislation. Currently the CLEAR Act has 38 cosponsors in the Senate and 172 cosponsors in the House.

Community banks face a regulatory burden that is completely out of proportion to their size, business model, and risks they pose to the financial system. Regulations disproportionally burden community banks because they cannot spread these costs over a large number of customers. Targeted and sensible regulatory relief will allow community banks to better serve their customers and communities.

This CLEAR Act included the following important provisions.

  • Providing “qualified mortgage” status under the CFPB’s ability-to-repay rules for any mortgage originated and held in portfolio for at least three years by a lender with less than $10 billion in assets.

  • Exempting from any escrow requirements any first lien mortgage held by a lender with less than $10 billion in assets.

  • Exempting servicers that service 20,000 or fewer mortgages from certain new servicing rules.

  • Providing an exemption from the independent appraisal requirement for mortgages of less than $250,000.

  • Providing that a financial institution is not required to provide an annual privacy notice to its customers if it has not changed its privacy policies (House version only).

  • Exempting community banks with assets of less than $10 billion ($1 billion in Senate version) from the Sarbanes-Oxley 404(b) internal-controls assessment mandates. The exemption threshold would be adjusted annually to account for any growth in banking assets.

  • Requiring the SEC to conduct a cost-benefit analysis of new or amended accounting principles (House version only).

  • Requiring the Federal Reserve to revise the Small Bank Holding Company Policy Statement by increasing the qualifying asset threshold from $500 million to $5 billion.

CBAI thanks Senator Kirk and Congressman Rodney Davis, Bill Enyart, Aaron Schock, Bobby Rush, John Shimkus, Randy Hultgren, and Adam Kinzinger and Tammy Duckworth for your support for Illinois’ community banks.

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U.S. House Passes CBAI/ICBA Advocated Regulatory Relief Legislation

May 6, 2014

The U.S. House of Representatives passed two CBAI/ICBA advocated regulatory relief bills which were inspired by ICBA’s Plan for Prosperity regulatory relief platform. The votes came one week after CBAI’s Call on Washington and the ICBA’s Washington Policy Summit where community bankers from across Illinois and the nation met with their legislators and regulators to advocate on behalf of community banks.

H.R. 3329 would increase the qualifying asset threshold of the Small Bank Holding Company Policy Statement from $500 million to $1 billion and allow small savings and loan holding companies to be covered by these provisions. This legislation would make it easier for community bank and thrift holding companies to raise capital.

H.R. 2672 would create a process where individuals could petition the Consumer Financial Protection Bureau to have a county designated as rural. A broader range of evaluation criteria would be allowed to more accurately identify rural counties and help ensure continued access to mortgage credit in those communities.

These bills passed the House by voice vote, indicating strong bipartisan support. CBAI thanks the Illinois members of the House for supporting this important community bank regulatory relief legislation.

CBAI joins the ICBA in urging the U.S. Senate to take up and quickly pass both bills.

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Senator Kirk Supports Fed Board Nominee with Community Banking Experience

April 10, 2014

Illinois Senator Mark Kirk joined with a bipartisan group of United States Senators in a letter to President Obama urging thatSenator Mark Kirk 1 the next Federal Reserve Board nominee have a background in community banking or community bank supervision. Community banks serve a vital role in the nation’s economy, and CBAI believes that the next Fed nominee should be someone who understands the community bank perspective.

The letter to the President stated, “Nominating an individual with community banking or supervisory experience would ensure that future Federal Reserve actions and regulations are tailored to reflect the nuanced understanding of the regulatory and economic environment faced by community banks, and that the role that these institutions play in their communities and in our financial system is not diminished.”

CBAI thanks Senator Kirk for supporting the effort to add community banking experience to the Fed Reserve Board. Read Letter.

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Senator Mark Kirk Cosponsors Community Bank Regulatory Relief Measures

March 25, 2014

Illinois Senator Mark Kirk recently agreed to cosponsor important regulatory relief legislation for community banks. Here is a brief explanation of the two measures:SenatorMarkKirk

S. 635 – The Privacy Notice Modernization Act of 2013 eliminates the requirement that financial institutions mail annual privacy notices when there has been no change in policies and practices with respect to disclosing nonpublic personal information.

S. 727 – The Financial Institutions Examination Fairness and Reform Act establishes examination standards including: firm deadlines for exit interviews and receipt of examination results, an appeals process, establishes a FFIEC Ombudsman separate from the prudential regulators, and provides safeguards for insured depository institutions from retaliation by federal banking agencies for exercising its rights.

Senator Kirk is also an original cosponsor of the Community Lending Enhancement and Regulatory Relief Act of 2013 (CLEAR Act). This legislation’s twelve provisions, drawn from the Independent Community Bankers of America’s Plan for Prosperity, will provide much needed tiered regulation and regulatory relief for community banks.

CBAI thanks Senator Kirk for taking a leadership position on these important community bank regulatory relief bills.

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Appeals Court Rules Against Merchants on Debit Interchange

March 21, 2014

The U.S. Court of Appeals for the District of Columbia Circuit overturned a lower court decision that would have required even lower debit interchange price caps than those promulgated under the Fed’s interchange rule. The lawsuit filed by retail trade groups challenged the Fed’s interpretation of the Dodd-Frank Act which required it to cap swipe fees on debit-card transactions.

Under the Dodd-Frank Act the Fed was charged with setting swipe fees on debit transaction that are “reasonable and proportional” to the cost incurred for each transaction for financial institutions with at least $10 billion in assets. The Fed originally proposed capping the debit interchange fee at 12 cents per transaction, but then raised the cap to 21 cents plus 5 basis points of the transaction value. The three-judge panel ruled that that the Fed’s higher rate cap remain in place, which turns back a challenge by retailers which argued the Fed erred when it raised the rate from an initially proposed 12 cents/transaction.

ICBA and a coalition of trade associations filed a friend-of-the-court brief and participated in oral arguments in the case. John Buhrmaster, ICBA’s Chairman and President of 1st National Bank of Scotia, N.Y. called the ruling a reasonably good result, “But we should not lose sight of the fact that [the] Fed’s interpretation hurts consumers, hands billions of dollars to the biggest merchants, and does absolutely nothing to lower prices.”