A bill led by U.S. Reps. French Hill (R-AR) and Andy Barr (R-KY) to reduce regulatory burdens on community banks and expand access to credit for small businesses and families was approved by the House Financial Services Committee last week.
The Main Street Capital Access Act, H.R. 6955, would modernize outdated banking regulations, ease the formation of new community banks, and tailor federal requirements to bank size and risk profile rather than applying the same rules designed for large Wall Street institutions.
“Community banks are the heartbeat of Kentucky’s economy,” said Rep. Barr, chairman of the Subcommittee on Financial Institutions. “They power our small businesses, support our farmers, and help families achieve the American Dream. That’s why we must advance a regulatory framework that encourages growth and fuels economic activity on Main Street.”
Financial Services Committee Chairman Hill sponsored the bill on Jan. 7 along with lead original cosponsor Barr and 28 other Republican cosponsors. Following committee passage of the bill on March 4, it moved to the full U.S. House for consideration.
Rep. Barr’s office said the legislation addresses a concerning trend in which community bank formation slowed dramatically. There were 181 new bank charters granted in 2007, but between 2010 and 2019 fewer than 10 new banks opened per year on average. Rural communities have been hit particularly hard, with 794 rural counties losing a combined 1,553 bank branches between 2012 and 2017.
Other key provisions of H.R. 6955 include a three-year phase-in period for capital requirements for newly chartered banks, simplified reporting requirements for small and mid-sized institutions, and reforms to the bank examination process to ensure clearer and more consistent supervisory standards, according to a bill summary.
The bill has support from industry groups including the American Bankers Association, the Independent Community Bankers of America, and the Consumer Bankers Association.