Pub. 5 2016 Issue 1

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 6 2 015 STARTED ON an optimistic note for much needed regulatory relief for banks and their customers. Senator Richard Shelby, Chairman of the Senate Banking Committee, announced that he would sponsor a major piece of legislation focused on community bank regulatory relief. Reasons for optimism were not unfounded since elected officials in Washington on both sides of the aisle were vocally supportive of significant relief, for community banks in particular. That bi-partisanship quickly broke down when Sen. Shelby introduced his bill. After debating the bill in committee, the bill passed on a straight party line vote with Sen. Sherrod Brown and Sen. Elizabeth Warren leading the opposition to the bill, citing not wanting to amend the Dodd-Frank Act in any way. The Democrats on the committee offered their own version of a regulatory relief package that offered little of anything that would have been beneficial to banks or their customers. Efforts to craft a compromise that would be acceptable to both sides of the aisle were spearheaded by Sen. Jerry Moran, who worked hard with some of the more reasonable Democrats on the committee during the summer and fall. However, those efforts failed when the Democrats decided to pull out of the discussions. We thank Senator Moran and his banking staff, Will Ruder for all of their hard work. In the meantime, it became increasingly evident that the Shelby bill would not reach the Senate floor because of the threat of a Presidential veto. To counter that, Sen. Shelby was able to insert the language of his bill into a spending bill to ensure its consideration at the end of the day. However, when that day came, the Omnibus Spending bill that was ultimately considered did not include any regulatory relief measures. It was reported that the Democrat leadership decided that any roll back of Dodd-Frank was one of the issues that was not acceptable to them and the Shelby bill was removed from the bill in the very last days of negotiation. Thousands of bankers in Kansas and all across the country, the staffs of the ABA and ICBA and all of the State Bankers Associations worked very hard all year on this issue – and especially in the last month – to get this legislation across the finish line. Even though it was an uphill battle, especially with a veto threat hanging over our heads, we are very disappointed that something of significance could not be accomplished. The only regulatory relief measures that passed this year were contained in the “Highway Bill.” That legislation included language that would: expand the number of banks eligible for the 18-month exam cycle, equalize the SEC registration and de-registration thresholds for savings and loan holding companies, reduce the burden of unnecessary privacy notice paperwork, expand Trups CDO relief for smaller bank holding companies and establish a process for designating an area rural for purposes of Consumer Financial Protection Bureau exemptions. However, it also included a provision that would siphon off the dividends of Federal Reserve member banks of over $10 billion in assets. While that does not affect any banks headquartered in Kansas, it sets a horrible precedent. On a positive note, the banking industry was able to persuade the House to hold an oversite hearing for the Farm Credit Administration. Overall, the hearing was positive for our long-term goals of reining in the FCS and holding their regulator accountable. Many groups and individuals have been pushing hard for this hearing for a long time. Several State Banking Associations, along with the ABA have been working towards this as a means of getting some of our issues on the “official” table. Hopefully these hearings will be held annually and will be used to spotlight other examples of “mission creep,” those areas where they hold a huge competitive advantage over the banking industry and the fact that equal taxation would not really negatively impact them at all. KBA LEADERS LEDGER FEDERAL LEGISLATIVE YEAR IN REVIEW - “THE YEAR OF REGULATORY RELIEF” ENDS WITH DISAPPOINTMENT By Chuck Stones, KBA President & CEO