Senate Banking Committee Evaluated Financial Institutions in Communities

June 8, 2017

On Thursday, June 8, 2017, the Senate Banking Committee held a hearing entitled: “Fostering Economic Growth: The Role of Financial Institutions in Local Communities.” The hearing was the first of several examining proposals the Committee received to help foster economic growth. In his opening statement, Committee Chairman Mike Crapo (R-ID) noted how community banking has become increasingly concentrated, more so in the years following Dodd-Frank Act. “I am concerned that in a rush to implement new regulation, regulators have often ignored the cumulative effect of the rules, and that there is a lack of coordination among them. We want our nation’s financial institutions to be well-capitalized and well-regulated, but they should not be drowned by unnecessary compliance costs.” Crapo further emphasized the importance of reviewing the current financial regulatory framework to determine “what is working and what is not working.” Ranking Member Sherrod Brown (D-OH) remarks echoed that of the Chairman’s, but would want to measure the amount of economic growth change would produce.

 

The hearing featured testimony from:

 

  • Ms. Dorothy A. Savarese, Chairman, President and CEO, The Cape Cod Five Cents Savings Bank;
  • Mr. Steve Grooms, President and CEO, 1st Liberty Federal Credit Union;
  • Mr. R. Scott Heitkamp, President and CEO, ValueBank;
  • Mr. Dallas Bergl, CEO, INOVA Federal Credit Union;
  • Mr. John Bissel, President and CEO, Greylock Federal Credit Union; and
  • Mr. Adam Levitin, Professor of Law, Georgetown University Law Center.

 

Much of the witnesses’ testimony focused on the need for regulatory relief, through targeted reforms or exemptions, to help community banks and credit unions with compliance burdens.

 

During the question and answer period of the hearing, there was significant discussion on the regulatory burdens community banks and credit unions face and how the rules are more taxing on these institutions in comparison to larger ones. Democratic Senators expressed their concerns with regulatory relief for larger banks, noting it would not stimulate economic growth, but would instead increase risks to the financial system.