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 March 1, 2006 #06-12
E-mail: [email protected]

ACB CITES URGENT NEED FOR REGULATORY RELIEF, LISTS PRIORITIES

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WASHINGTON, D.C. „Ÿ America’s Community Bankers urged Congress today to adopt regulatory relief legislation for community banks so that they can better serve customers and small businesses in their local markets.

Testifying before the Senate Banking Committee, ACB Chairman F. Weller Meyer said: “The need to adopt regulatory relief legislation is urgent,” because the cumulative impact of regulatory burden has taken its toll on community banks, with large banks getting bigger and community banks merging. “Community banks stand at the heart of cities and towns everywhere, and to lose that segment of the industry because of over-regulation is crippling to those communities,” he said.

“The complexity of the regulations and the precision required to deliver products and services ‘according to the rules’ have grown to the point where our employees and our customers are drowning in minutia,” said Meyer who is also chairman, president and CEO, Acacia Federal Savings Bank, Falls Church, Va.

Meyer highlighted two regulatory concerns at the top of community bankers’ priority lists: implementation of corporate governance and anti-money laundering laws. While supporting the goals of the Sarbanes-Oxley Act and other corporate governance laws, and the fight against crime and terrorism, he called for significant changes either through regulation or legislation.

Corporate Governance. Meyer supported the efforts of the Securities and Exchange Commission’s Advisory Committee on Smaller Public Companies to recommend differentiated section 404 requirements based on the size of a public company’s market capitalization and annual revenue. ACB recommended that it is appropriate to provide relief from the Sarbanes-Oxley Act’s section 404 internal control and attestation requirements because community banks are already subject to heavy regulation and routine bank examinations.

Anti-Money Laundering. ACB recommended raising the dollar value threshold that triggers currency transaction reports from the current $10,000 to $20,000, and modifying or eliminating the 12-month waiting period for new customer exemptions.

Business Lending. ACB recommended eliminating the restriction on federal savings associations’ lending on small business loans and increasing the lending limit on other commercial loans to 20 percent of assets because of the increased demand for those loans.

Privacy Notices. ACB strongly supported eliminating annual privacy notices for banks that do not share information with nonaffiliated third parties. “Redundancy under these circumstances does not enhance consumer protection,” Meyer said. Notices would be provided initially for new customers, with subsequent notices only when terms are modified.

Securities Laws Parity. ACB advocated granting the securities activities of savings associations parity with banks under the Securities Exchange Act and the Investment Advisers Act. “Savings associations and banks should operate under the same basic regulatory requirements when engaged in identical trust, brokerage and other activities,” Meyer said.

Examinations. ACB supported giving banking regulators more flexibility in scheduling safety and soundness and compliance examinations for well-capitalized and well-managed institutions. ACB also supported raising the threshold for the 18-month examination cycle from $250 million in assets to $1 billion.

Court Jurisdiction. ACB recommended deeming a federal savings association to be a citizen of its home office state. Federal savings associations are the only financial institutions that can be denied access to federal courts based on diversity jurisdiction, Meyer explained.

ACB’s testimony also called for easing restrictions on federal savings associations for residential development lending and removing restrictions on secured automobile lending.

Click here to read 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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