U.S. Sens. Mike Rounds (R-SD) and Roy Blunt (R-MO) stood up for small businesses and families in rural areas by cutting red tape for the community banks that serve them through legislation they introduced on Tuesday.
Their bill seeks to reduce the burdens community banks face when complying with certain financial regulations and makes it easier for them to raise capital.
“Community banks are a vital resource for small businesses and families in rural areas like South Dakota,” said Rounds, a member of the Senate Banking Committee. “Relieving community banks from unnecessary regulatory burdens will increase credit access for South Dakota families across the state. Our legislation would roll back some of the ‘one-size-fits-all’ federal regulations so community banks are once again able to grow and support their communities.”
Under the Community Bank Access to Capital Act of 2017, community banks with less than $50 billion in assets would not have to comply with Basel III capital requirements, and community banks with less than $1 billion in assets would no longer have to comply with internal control reporting requirements under the Sarbanes-Oxley Act.
Currently, Basel III capital requirements mandate that banks fund themselves with a minimum of 4.5 percent of common equity of risk-weighted assets, and a provision of the Sarbanes-Oxley Act requires internal control of financial reporting and disclosure certifications from banks.
“Missouri’s community banks play a critical role in keeping our state’s small businesses thriving,” Blunt said. “This bill will rein in excessive red tape and allow these banks to expand access to credit for Missouri families and local business owners. I urge all of my colleagues to support this measure and help strengthen economic growth in our small and rural communities.”
Provisions of the Community Bank Access to Capital Act would also take steps to make it easier for banks to raise capital required to finance expansions.
The measure would also broaden the Securities and Exchange Commission’s (SEC) authority under Regulation D of the Security Act of 1933 to grant exemptions that enable certain companies to offer and sell their own securities without first registering with the SEC.