WASHINGTON, D.C. – U.S. Senators Angus King (I-Maine), Deb Fischer (R-Neb.), Mark Warner (D-Va.), and Jon Tester (D-Mont.) announced they are introducing legislation today to provide immediate regulatory relief to America’s small financial institutions, like community banks and credit unions, that will help them to better serve their communities.
As many smaller financial institutions struggle under the weight of shortsighted regulations, the RELIEVE Act would help lift the burden by modernizing outdated regulations, making technical corrections to the Dodd-Frank Act, and providing parity for credit unions with regard to insurance coverage of lawyer trust accounts and other escrow accounts.
“Our community banks and credit unions are the bedrock of small towns across America. It’s where people often get home mortgages, car loans, and finance their kids’ education, and you’re likely to work with someone who lives down the street when you walk through the door,” Senator King said. “But these smaller institutions and the services they provide are being hammered by a tidal wave of poorly-tailored regulations, and that’s just not right. We owe it to these institutions – and the millions of Americans who depend on them – to provide some measure of relief. America will be the better for it when we do.”
“Smaller financial institutions are important sources of credit and capital many hardworking Americans rely on to provide for their families or get a small business off the ground. To help middle class families continuing to struggle, we should promote policies that improve access to these critical financial resources and fuel economic growth,” Senator Fischer said. “The RELIEVE Act will go a long way in removing misguided regulatory burdens from the Dodd-Frank Act and ensure that financial institutions can better support our small businesses, foster opportunities for the middle class, and strengthen our communities.”
“Community banks and credit unions are often the only source of credit in small towns across Virginia. Their activity did not blow up the financial system. This bill says ‘one size does not fit all,’ and directs regulators to ease burdens on the small financial institutions that are lifelines for so many Virginia farmers and small business owners,” Senator Warner said.
“Rural Americans rely on community banks and credit unions to support their families and small businesses,” Senator Tester said. “We need to make sure rural lenders have the flexibility to strengthen our economy and compete with larger financial institutions. That’s what this bipartisan bill does.”
More specifically, the bill would:
- Require the Federal Reserve to revise the Small Bank Holding Company Policy Statement so that the policy applies to bank holding companies and savings and loans holding companies with pro forma assets of less than $1 billion, an increase from the current threshold of $500 million.
- Improve the definition of “rural” so that more counties will be considered rural for the purposes of the rules of the Bureau of Consumer Financial Protection; increase the annual mortgage origination limit for rural creditors from 500 to 1,000 per year.
- Provide credit unions parity with FDIC-insured institutions when it comes to deposit insurance coverage on Interest on Lawyers Trust Accounts (IOLTAs) and other escrow accounts.
A summary of the legislation can be viewed by clicking HERE.
The bill has also been endorsed by the U.S. Chamber of Commerce, the American Bankers Association, and the Credit Union National Association.