ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release May 19, 2005 #05-29
E-mail: [email protected]

ACB URGES CONGRESS TO REDUCE REGULATORY BURDEN

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WASHINGTON, D.C. ─ America’s Community Bankers urged Congress today to enact legislation that would reduce the regulatory burden on community banks.

In testimony before the House Financial Institutions Subcommittee, ACB Second Vice Chairman Mark E. Macomber said: "When unnecessary and costly regulations are eliminated or simplified, community banks will be able to better serve consumers and small businesses in their local markets. ACB has a longstanding position in support of meaningful reduction of regulatory burden."

Macomber, who is also president and CEO, Litchfield Bancorp, Litchfield, Conn., said: "As a community banker, I understand the importance of reasonable consumer protection regulations. As a community banker, I also see how much it costs, both financially and in numbers of staff hours for my small mutual community bank to comply with the often unreasonable applications of these laws. As a community banker, I see projects that will not be funded, products not offered and consumers not served because I have had to make a large resource commitment to comply with the same regulations with which banks hundreds of times larger must comply."

Macomber discussed the implementation of two laws — the Bank Secrecy Act and the Sarbanes-Oxley Act — that have created "uncertainty and burden on community banks." He recognized that neither law is expected to be amended this year, but urged the subcommittee to continue its oversight so that regulatory implementation does not create unintended burdens.

Macomber singled out three priority recommendations to be addressed in the legislation to help community banks make doing business easier and less costly:

Business Lending. ACB is seeking removal of the lending limit for savings associations on small business loans and a modest increase in the limit on other commercial loans to 20 percent of assets.
"Expanded authority would enable savings associations to make more loans to small- and medium-sized businesses," Macomber said, "thereby enhancing their role as community based lenders."
SEC Parity. ACB is urging statutory parity for savings associations with commercial banks offering the same trust services from certain registration requirements of the Investment Advisors Act of 1940 and the Securities Exchange Act of 1934.
"As more savings associations engage in trust activities, there is no substantive reason to subject them to different requirements," Macomber said.
Interstate Branching. ACB strongly supports removing unnecessary restrictions on the ability of national and state banks to engage in interstate branching. ACB also recommended that Congress eliminate states’ authority to prohibit an out-of-state bank or bank holding company from acquiring an in-state bank that is less than five years old.

Macomber said new branching rights should not be available to newly acquired or chartered industrial loan companies with commercial parents that derive more than 15 percent of revenues from non-financial activities.

Click here for the testimony.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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