FOR IMMEDIATE RELEASE
February 1, 2012
ABA Media Contact: Jeff Sigmund
(202) 663-5439
E-mail: jsigmund@aba.com
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WASHINGTON – The American Bankers Association testified today before the House Subcommittee on Financial Institutions and Consumer Credit, expressing strong support for bipartisan legislation that would provide critical balance and transparency to the bank examination process.

ABA Chairman Albert C. Kelly, Jr., testified that the Financial Institutions Examination Fairness and Reform Act (H.R. 3461) introduced by Subcommittee Chairman Shelley Moore Capito (R-WV) and Ranking Member Carolyn Maloney (D-NY) would help address some examiner decisions that unnecessarily reduce capital available for lending -- particularly to small businesses.  Kelly is also chairman and chief executive officer of SpiritBank, headquartered in Bristow, Okla. 

“This bill takes a major step toward a more balanced and transparent approach regarding how, and on what basis, decisions are made by regulatory agencies in the examination process,” he said.  “We strongly urge its enactment, which would increase banks’ ability to help local businesses grow and create jobs.”

Although no single piece of legislation could address the wide range of concerns bankers have about today’s supervisory environment, Kelly testified that H.R. 3461 takes a major step toward restoring this balance.

“It is rooted in fundamental principles of accountability, transparency and quality assurance regarding regulators’ decision-making during the examination process,” he said.  “The bill would confirm clear exam standards based on long-established interagency policy and create an independent FFIEC ombudsman to ensure the consistency and quality of all examinations.  It provides mechanisms that guard against overly conservative examinations and provides a meaningful path for appeal by banks when there are legitimate concerns that the examination decisions have gone too far.”

While the banking industry and its regulators both desire a strong banking system that meets the needs of customers in a safe manner, Kelly noted that precisely how that’s achieved can make an enormous difference.

“Because the U.S. banking system is vital to the health of our nation, the manner in which it is regulated has a direct impact on the country’s economic growth and vitality,” he said.  “Overly conservative examinations translate into less credit in local communities, which means businesses grow more slowly and create fewer jobs.  There is no question that the regulatory pendulum has swung too far in reaction to the financial crisis.”

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For a copy of Kelly’s full testimony, please click here.

About American Bankers Association
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two million employees. The majority of ABA’s members are banks with less than $165 million in assets. Learn more at aba.com.