[Congressional Record Volume 160, Number 67 (Tuesday, May 6, 2014)]
[House]
[Pages H3424-H3426]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COMMUNITY FINANCIAL INSTITUTIONS AND FOSTERING ECONOMIC GROWTH
Mrs. CAPITO. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 3329) to enhance the ability of community financial
institutions to foster economic growth and serve their communities,
boost small businesses, increase individual savings, and for other
purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3329
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CHANGES REQUIRED TO SMALL BANK HOLDING COMPANY
POLICY STATEMENT ON ASSESSMENT OF FINANCIAL AND
MANAGERIAL FACTORS.
(a) In General.--Before the end of the 6-month period
beginning on the date of the enactment of this Act, the Board
of Governors of the Federal Reserve System shall publish in
the Federal Register proposed revisions to the Small Bank
Holding Company Policy Statement on Assessment of Financial
and Managerial Factors (12 C.F.R. part 225-appendix C) that
provide that the policy shall apply to bank holding companies
and savings and loan holding companies which have pro forma
consolidated assets of less than $1,000,000,000 and that--
(1) are not engaged in any nonbanking activities involving
significant leverage; and
(2) do not have a significant amount of outstanding debt
that is held by the general public.
(b) Conforming Amendment.--Section 171(b)(5)(C) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5371(b)(5)(C)) is amended by inserting ``or small
savings and loan holding company'' after ``any small bank
holding company''.
(c) Rule of Construction.--Nothing in this Act or the
amendments made by this Act may be construed as limiting the
authority of the Board of Governors of the Federal Reserve
System to exclude a bank holding company or a savings and
loan holding company from the policy statement described
under subsection (a), if such action is warranted for
supervisory purposes.
(d) Definitions.--For purposes of this section:
(1) Bank holding company.--The term ``bank holding
company'' has the meaning given that term under section 2 of
the Bank Holding Company Act of 1956 (12 U.S.C. 1841).
(2) Savings and loan holding company.--The term ``savings
and loan holding company'' has the meaning given that term
under section 10(a) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)).
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
West Virginia (Mrs. Capito) and the gentleman from Florida (Mr. Murphy)
each will control 20 minutes.
The Chair recognizes the gentlewoman from West Virginia.
General Leave
Mrs. CAPITO. Madam Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
and then submit extraneous materials for the record on H.R. 3329,
currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from West Virginia?
[[Page H3425]]
There was no objection.
Mrs. CAPITO. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I would like to thank Mr. Luetkemeyer and Mr. Murphy
of Florida for drafting the legislation before us this afternoon and
for working together on the Financial Services Committee.
H.R. 3329 provides targeted regulatory relief for small bank holding
companies. Under the current regulatory framework, the Federal
Reserve's rules sometimes make it difficult for small banks to make
acquisitions. This is because the acquiring institution often uses debt
financing to make the acquisition.
Recognizing that many small institutions rely on debt financing for
an institution, the Federal Reserve requires policy statements to
ensure the debt is managed properly and subsidiary banks are well
capitalized. The legislation before us today makes it easier to form
new holding companies, fund existing holding companies and make
acquisitions by issuing debt at the holding company level by raising
the threshold from $500 million in consolidated assets to $1 billion in
consolidated assets.
I commend the authors of this bill for their hard work on this
bipartisan legislation which passed the committee by voice vote last
November. This is about creating jobs, getting credit across the
country for consumers and for small business owners.
I urge adoption of the bill and reserve the balance of my time.
Mr. MURPHY of Florida. Madam Speaker, I yield myself such time as I
may consume.
First, I want to thank the gentlewoman from California for her
leadership on this and countless issues that come before our committee.
I also want to thank the gentlewoman from West Virginia, the chair of
Financial Institutions, for her constant willingness to come to the
center and work for the greater good of our country.
I also want to thank the gentleman from Missouri (Mr. Luetkemeyer)
for his outstanding leadership working for true regulatory relief to
create jobs while protecting consumers. This is not the first bill that
we have worked on together, and I hope it is not the last.
Across the Treasure Coast and Palm Beaches, the constituents that I
am privileged to represent know that small businesses are the backbone
of our economy. They understand that capital is the lifeblood that
enables those businesses to grow, spurring innovation and creating
jobs.
Community banks are on the front lines providing that capital, but
they are being strangled by well-intentioned but excessive regulation.
Let me be clear: I am not against reining in the excesses of Wall
Street banks.
After the financial crisis nearly took down the economy and cost
Americans $17 trillion worth of wealth and equity, the country's
biggest banks should be held to a higher standard. It doesn't take a
CPA to see the difference between a $2 trillion interconnected,
globalized Wall Street bank and the 550 community banks on the town
square under $1 billion in assets that do not yet get the regulatory
relief provided by the Fed policy statement. We are here today to
change that.
This bill would provide much-needed regulatory relief to community
banks. Everyone says they are for community banks. Today is the day to
prove it.
Madam Speaker, I include a letter of support from the Independent
Community Bankers of America into the Record.
Independent Community Bankers of America,
Washington, DC., May 5, 2014.
House of Representatives,
Washington, DC.
Dear Representative: On behalf of the more than 6,500
community banks represented by the Independent Community
Bankers of America, I write to express our strong support for
H.R. 3329, which is scheduled for floor consideration this
week. Introduced by Reps. Blaine Luetkemeyer (R-MO), Patrick
Murphy (D-FL), Tom Cotton (R-AR), Mike Quigley (D-IL), and
Ann Kuster (D-NH), H.R. 3329 is bipartisan legislation that
would direct the Federal Reserve to increase the qualifying
asset threshold of the Small Bank Holding Company Policy
Statement from $500 million to $1 billion and allow small
savings and loan holding companies to be covered by its
provisions. This legislation is a key priority for ICBA and a
provision of our Plan for Prosperity: A Regulatory Relief
Agenda to Empower Local Communities. ICBA urges all members
of the House to vote YES on H.R. 3329.
Revising the Policy Statement will make it easier for small
bank and savings and loan holding companies to raise both
debt and equity and downstream the proceeds to their
subsidiary banks. The Policy Statement contains a number of
safeguards to ensure that the debt is managed responsibly and
subsidiary banks remain well capitalized. Increasing the
eligibility threshold to $1 billion to account for inflation,
industry consolidation, and asset growth will help an
additional 515 bank and savings and loan holding companies
raise capital for additional consumer and small business
lending, leading to job creation and community development.
Thank you for your consideration.
Sincerely,
Camden R. Fine,
President & CEO.
Mr. MURPHY of Florida. Madam Speaker, with that, I urge my colleagues
to vote ``yes'' on the Luetkemeyer-Murphy bill, and with no further
speakers, I yield back the balance of my time.
Mrs. CAPITO. Madam Speaker, I ask unanimous consent that Mr.
Luetkemeyer be permitted to control the remaining balance of my time.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from West Virginia?
There was no objection.
Mr. LUETKEMEYER. Madam Speaker, I yield myself such time as I may
consume.
I want to thank both Chairman Hensarling and Ranking Member Waters
for their support of my bill as well as the hard work of Chairman
Congresswoman Capito here for her help and support today, as well as
Congressman Murphy for his sponsorship as well.
At a time when regulators are requiring more and more from small and
community-based institutions, I appreciate the opportunity to work
across party lines to offer some commonsense relief.
Small bank and thrift holding companies face unique challenges with
regards to capital formation, which is a particular concern at a time
when regulators are demanding higher capital levels in response to
Basel III. Understanding these challenges, the Federal Reserve has
recognized that small bank holding companies have limited access to
financing and, as a result, face difficulties in the acquisition of
small banks by small holding companies, which often requires the use of
debt.
The Federal Reserve Bank holding company policy statement, first
issued in 1980, allows for relief from certain requirements, making it
necessary for a small bank holding company to raise the necessary
capital and issue debt. The policy statement also simplifies
acquisitions and formation of new bank and thrift holding companies.
These are important tools in ensuring that our smallest institutions
can continue to lend in their communities, hire new staff, and survive
what remains of a very difficult time for community banks.
H.R. 3329 simply increases the threshold in the Fed's policy
statement from $500 million to $1 billion in assets.
{time} 1730
The $500 million threshold has not been touched since 2006.
In the past 7 years, our Nation's smallest bank and thrift holding
companies have faced significant recession, consolidation, and an
alarming number of bank failures. While this bill does offer regulatory
relief to our Nation's smallest institutions, it also includes
safeguards that allow the Fed to continue to monitor for safety and
soundness. The Fed retains the right to impose capital standards on a
holding company if the Board of Governors decides it is needed to
protect the safety and soundness of that institution and its customers.
Additionally, the policy statement outlines requirements that limit a
bank holding company's ability to benefit from this relief. H.R. 3329
keeps these safeguards in place. This noncontroversial bill will help
more than 500 of our Nation's smallest banks and thrift holding
companies.
H.R. 3329 has bipartisan support and the support of the Independent
Community Bankers of America and the American Bankers Association.
H.R. 3329 will go a long way in ensuring that these institutions are
able to grow stronger and continue to serve their communities.
I urge my colleagues on both sides of the aisle to support this
commonsense legislation.
[[Page H3426]]
With that, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from West Virginia (Mrs. Capito) that the House suspend the
rules and pass the bill, H.R. 3329.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
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