Pub. 2 2013 Issue 9

December 2013 17 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s G ETTING LEGISLATION THROUGH Congress and signed by the president these days is an extremely heavy lift. However, while legislative advocacy – and action – is both challenging and difficult, we don’t give up because the job got harder. We pull together, become more engaged and work to educate lawmakers about our issues. That’s how we’re moving forward on issues like regulatory relief, credit unions’ unfair and unnecessary tax exemption and the Farm Credit System’s outdated and outmoded tax breaks. We also work with the regulators in identifying problems and proposing solutions that will help you get back to the business of banking – serving customers and building communities – rather than devoting increasing resources to excessively burdensome regulations. In a recent letter I sent to the federal banking regulators, we identified several steps that can be taken to strengthen community banks, and our nation. These actions do not require additional legislation. They are practical and do-able. They will help address a disturbing trend identified in the FDIC’s latest Quarterly Banking Survey, which covers the year’s second quarter. In it, the FDIC reported a sad milestone: The number of banks in the United States declined to fewer than 7,000, a number last seen in 1891. While no one can definitively say what the optimal number of banks should be, I think we can agree that for the largest and most diverse economy in the world, fewer banks is clearly a trend moving in the wrong direction. We want to move forward. That’s why we told the regulators that it’s time to begin to work together to identify changes that will make a difference and promote the strength and resurgence of community banking. And we need to act soon before further erosion takes place. Our suggestions are meant to kick-start the discussions. We proposed that the regulators: end punitive regulation of mortgage servicing assets; ensure the Volcker Rule does not impose inappropriate compliance requirements on community banks; strengthen the ombudsman programs in each agency; simplify the Call Report; remedy the disadvantages Basel III imposes on Subchapter S banks; and speak out about the competitive impact of tax-advantaged credit unions and the Farm Credit System. There’s no doubt that both ABA and the regulators can add more action items to our list. We are prepared to meet with them to identify more issues and propose more practical solutions. Don’t hesitate to share your thoughts on what rules work, what don’t and what can be done to make things better as we move ahead. It’s essential to begin – now – the resurgence in community banking. As I told the regulators, it’s important not only to preserve community banks, but to create conditions for its vitality and growth for the benefit of the customers and communities that rely on them. E-mail Frank Keating at keating@aba.com © 2013 American Bankers Association. All rights reserved. Reprinted with permission. TARGETED RELIEF FOR COMMUNITY BANKS By Frank Keating, President and CEO American Bankers Association