Bipartisan legislation recently introduced by U.S. Sen. Jerry Moran (R-KS) would address regulations that can prevent community banks from lending, stifling local economic growth.
The Community Lending Enhancement and Regulatory Relief (CLEAR) Act, S. 1002, which Moran introduced with U.S. Sen. Jon Tester (D-MT), would address regulations that can slow down or stop the lending process for community banks.
“Local lenders are the lifeblood of cities in Kansas and across the country,” Moran said. “I often hear from lenders who tell me that over-regulation has reduced their ability to provide members of their communities with access to the capital they need to start and grow a small business or buy a home.”
Community banks with less than $1 billion in assets would be exempt from the Security and Exchange Commission’s (SEC) internal-controls assessment mandate rule. In order to support the housing recover, any first lien mortgage held by a lender with less than $10 billion in assets would be exempted from any escrow requirements.
“This legislation would help us create an environment where more small businesses can succeed and more Americans can buy and sell homes with the help of their hometown lender,” Moran said.
Also under the bill, all community lenders with less than $10 billion in assets would receive “qualified status” under the Consumer and Financial Protection Bureau’s (CFBP) ability-to-repay rules. Small banks would also be exempt from the Dodd-Frank Wall Street Reform and Consumer Protection Act’s Volcker Rule, which stipulates that banks cannot use funds from internal accounts to make certain investments or to increase profits.
Camden Fine, the president and CEO of the Independent Community Bankers of America (ICBA), voiced support for the measure, noting its ability to help support economic growth and job creation.
“The CLEAR Relief Act would help community banks meet the needs of their customers and promote local economic growth by providing common sense relief from many crushing regulatory burdens,” Fine said. “ICBA thanks Sen. Moran and strongly urges Congress to advance this bipartisan legislation to enhance economic and job growth in local communities.”