[Congressional Record Volume 164, Number 39 (Tuesday, March 6, 2018)]
[House]
[Pages H1393-H1395]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  COMMUNITY BANK REPORTING RELIEF ACT

  Mr. BARR. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 4725) to amend the Federal Deposit Insurance Act to require 
short form call reports for certain depository institutions.
  The Clerk read the title of the bill.
  The text of the bill is as follows

                               H.R. 4725

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Community Bank Reporting 
     Relief Act''.

     SEC. 2. SHORT FORM CALL REPORTS.

       Section 7(a) of the Federal Deposit Insurance Act (12 
     U.S.C. 1817(a)) is amended by adding at the end the 
     following:
       ``(12) Short form reporting.--
       ``(A) In general.--The appropriate Federal banking agencies 
     shall issue regulations that allow for a reduced reporting 
     requirement for a covered depository institution when the 
     institution makes the first and third report of condition for 
     a year, as required under paragraph (3).
       ``(B) Definition.--In this paragraph, the term `covered 
     depository institution' means an insured depository 
     institution that--
       ``(i) has less than $5,000,000,000 in total consolidated 
     assets; and
       ``(ii) satisfies such other criteria as the appropriate 
     Federal banking agencies determine appropriate.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Kentucky (Mr. Barr) and the gentleman from Michigan (Mr. Kildee) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Kentucky.
  Mr. BARR. Madam Speaker, I yield myself such time as I may consume, 
and I rise today in support of H.R. 4725, the Community Bank Reporting 
Relief Act.
  Community banks were hit hard by the Great Recession and the ensuing 
regulations. Numerous bankers have told me they are spending more and 
more money and resources and time on compliance costs and less money 
and resources on actually providing services to customers. This is 
particularly alarming because these small banks are so critical to 
their communities. From sponsoring the local T-ball team, to lending 
money to a farmer for the next year's crop, to helping the single mom 
purchase a used car so she can get to work, these banks are involved at 
every level of our communities all across America, but because of 
overregulation, these banks are rapidly closing and consolidating.
  Unfortunately, the headline for banks in the Commonwealth of Kentucky 
is no different. Since the enactment of the Dodd-Frank financial 
control law, we have seen a 20 percent drop in the number of banks in 
our State and there has been a dearth of charters for new banks. In 
fact, since 2010, there have been only a few de novo charters for banks 
nationwide.
  Now, some people say that consolidation and mergers have been a long-
term trend for the last 30 years and, therefore, not related to the 
recent uptick in regulations unrelated to Dodd-Frank, but they are 
clearly not seeing the bigger picture, because even after mergers, many 
branches in rural and other underserved communities are closing, 
leaving many Kentuckians to drive a town or two over just to get to the 
nearest bank.
  It is not just about a long-term trend of consolidation. There have 
been literally no new charters, whereas before the Dodd-Frank law was 
enacted, there were many, many new charters every year; and since the 
Dodd-Frank law was enacted, no new charters. So the consolidation trend 
has gotten a lot worse since this avalanche of red tape coming out of 
Washington, D.C., and that is having a very negative impact on rural 
and underserved American communities.
  While new technologies are helping bring banking services to anyone 
with an internet connection, many people still prefer the personal one-
on-one banking style that they grew up with and the personal 
interaction often that helps the banks themselves understand the exact 
needs of their customers.

                              {time}  1400

  The Dodd-Frank law was almost 2,300 pages and required dozens of 
agencies to create new regulations or revise existing ones. As a 
result, these agencies issued hundreds of regulations and, according to 
the Mercatus Center, the law placed about 28,000 new restrictions on 
the banking industry, effectively doubling the number of regulatory 
restrictions in title 12 of the Code of Federal Regulation to more than 
52,000.
  Although not part of the Dodd-Frank rush of regulations, a growing 
number of banks have cited the Federal Financial Institutions 
Examination Council's, or FFIEC, Consolidated Reports of Condition and 
Income--or call reports, as they are commonly called--as too 
burdensome.
  Each quarter, all national banks, State member banks, insured State 
nonmember banks, and savings associations are required to file these 
call reports. The reports contain approximately 50 pages of financial 
data on each bank, including their assets, liabilities, capital 
accounts, expenses, and income. However, these reports are very 
burdensome for community banks with limited resources and offer little 
value to the regulators relative to the last quarter's report.
  Thankfully, H.R. 4725, the Community Bank Reporting Relief Act, is 
fighting back against the bureaucratic nightmare of complying with 
these 52,000 restrictions by allowing banks with less than $5 billion 
in consolidated assets to file their call reports every 6 months as 
opposed to every 3 months.
  The impact of this regulatory change will be a huge development for 
banks across the country. Now they will spend less time on call reports 
and more time on actually helping customers. This means more capital 
will be flowing into our local economies, spurring job growth and 
economic development, while making a real difference in the lives of 
Americans trying to access affordable capital to buy a new home or car 
or start a business.
  I want to thank my good friend from Illinois, Congressman Randy 
Hultgren, for his leadership and for introducing this important 
legislation. Due to his leadership, this great community bank bill is 
being considered as a suspension on the floor today. That means that 
there is a great chance that this bill will build on its unanimous 
support earned during the House Financial Services Committee markup and 
will be a bipartisan provision in the Senate Banking chairman's 
Economic Growth, Regulatory Relief, and Consumer Protection Act, which 
is expected to pass out of the Senate very soon.

[[Page H1394]]

  In addition to Congressman Hultgren, I want to thank Chairman 
Hensarling and Ranking Member Waters for their hard work on this 
critical legislation, and I urge my colleagues to vote for H.R. 4725, 
the Community Bank Reporting Relief Act.
  I reserve the balance of my time.
  Mr. KILDEE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise to support H.R. 4725, the Community Bank 
Reporting Relief Act, which would reduce reporting requirements through 
first and third quarter call reports for depository institutions with 
less than $5 billion in total consolidated assets.
  This bill provides targeted regulatory relief to many of our smaller 
financial institutions, as has been the desire of both Democrats and 
Republicans on the committee and in this Congress for some time.
  Under the Obama administration, the Federal banking agencies began 
taking a series of steps to reduce and streamline various bank 
reporting requirements. Many of these requirements had existed for 
decades, including the quarterly Consolidated Reports of Condition and 
Income for a Bank, which is commonly referred to as a call report.
  These efforts by regulators have included creating a simpler call 
report for most community banks with less than $1 billion. Regulators 
have already been exploring raising the threshold to a comparable level 
that is proposed by this legislation. The regulators also allow for 
some data to be reported semiannually, as this bill would allow, or 
annually rather than quarterly.
  I am pleased that H.R. 4725 would give the regulators discretion to 
decide what information should be included in a reduced call report. It 
is also key that the bill would require a full call report every other 
quarter for banks under $5 billion, including at the end of the year, 
to make sure that regulators and the public have sufficient information 
on the health of financial institutions.
  Furthermore, this bill would permit regulators to limit the 
regulatory relief, as appropriate. This would, for example, exclude 
banks with foreign offices or ones that are affiliated with much larger 
banks, as they do today.
  This bill would appropriately maintain robust oversight of our 
Nation's largest banks while providing targeted relief for smaller 
institutions.
  As I said, we don't agree on everything. Many of us on this side 
believe that the robust protections built into Dodd-Frank have 
strengthened the financial system but that there are ways that we can 
improve and refine those restrictions in order to support particularly 
smaller institutions. This is a step in that direction, and I urge my 
colleagues to support H.R. 4725.
  I reserve the balance of my time.
  Mr. BARR. Mr. Speaker, I am pleased to yield 6 minutes to the 
gentleman from Illinois (Mr. Hultgren), the sponsor of the legislation 
and the vice chairman of the Subcommittee on Capital Markets, 
Securities, and Investments.
  Mr. HULTGREN. Mr. Speaker, I rise today to speak in support of the 
Community Bank Reporting Relief Act.
  I would like to begin by thanking Leader McCarthy and Chairman 
Hensarling for their support in getting this legislation to the floor. 
I also want to thank and express my appreciation to my colleagues,  
Andy Barr and Terri Sewell, for serving as original cosponsors on this 
legislation.
  I would also like to point out that this identical language has been 
included in the bipartisan regulatory relief bill that the Senate is 
expected to take up maybe sometime this week.

  By way of background, the Federal Financial Institutions Examinations 
Council requires banks and savings associations to file a quarterly 
Consolidated Report of Condition and Income, also known as the call 
report. Banking regulators use data in the call report to monitor the 
safety, soundness, performance, and risk profile of each institution 
and to assess the overall condition of the banking system.
  I think we can all agree that our Federal banking regulators should 
have regular updates on the overall performance and health of financial 
institutions. For example, this is important if Federal banking 
regulators are going to be prudent stewards of Federal deposit 
insurance. However, this does not mean that the Federal banking 
regulators need regular reports about every single data point on every 
single financial institution.
  Unfortunately, the reporting burden has grown significantly over the 
years, which means banks have to spend more time with compliance issues 
rather than working with families and businesses to meet their 
financial needs.
  When I introduced similar legislation last Congress, one community 
banker in Illinois, Greg Ohlendorf, with First Community Bank and 
Trust, shared with me: ``The quarterly call report has increased to 
some 80 pages supported by almost 700 pages of instructions, and it 
represents a growing burden on community banks.''
  According to a survey that the Independent Community Bankers of 
America conducted of its members in 2014, over 60 percent of the annual 
cost to prepare the call report goes to personnel salaries. This survey 
shows that this is not a highly automated process for those 
institutions and that oftentimes senior executives such as the chief 
financial officer are responsible for this regulatory burden.
  We also heard testimony in the Financial Institutions and Consumer 
Credit Subcommittee hearing from Robert Fisher, president and CEO of 
Tioga State Bank, on behalf of the ICBA, who stated: ``When I first 
started in banking in the mid-1980s, the report was 18 pages long. No 
change in our basic business model since that time warrants the sharp 
growth in our quarterly reporting obligation.''
  The length of the call report has simply gotten out of hand. 
Washington needs to get out of the way so that community banks can 
focus on meeting the needs of their communities. The role of smaller 
financial institutions is especially important in more rural areas, 
such as in my district, where larger banks tend to not have as many 
branches.
  The Community Bank Reporting Relief Act would require Federal banking 
regulators to permit for a short-form call report every other quarter 
for banks with less than $5 billion in assets and that satisfy other 
criteria determined by bank regulators.
  Federal banking regulators have not demonstrated there are 
statistically significant variations in this data quarter to quarter, 
and we heard testimony consistent with this from Tioga State Bank in 
the House Financial Services Committee. This means the banking 
regulators are simply collecting too much information too frequently. 
The Federal banking regulators would be required to take input from our 
neighborhood banks under consideration when making these changes. This 
cannot be simply check-the-box exercises, but real reform is necessary.
  However, nothing in this legislation would prevent regulators from 
having access to the information that they need to adequately 
understand the health of the banking system. Regulators will still 
receive the most important information every quarter.
  The Independent Community Bankers of America has suggested this short 
form call report include three schedules: schedules RI, an income 
statement; schedule RIA, changes in bank equity capital; and Schedule 
RC, the balance sheet.
  Furthermore, in the event there is any reason for concern about the 
health of the bank, regulators would maintain their authority to make 
ad hoc information requests.
  This legislation is supported by the American Bankers Association, 
the Independent Community Bankers of America, and the neighborhood 
banks in all of our districts who are looking for commonsense 
regulatory relief.
  I urge my colleagues to vote in support of this legislation. We must 
cut regulation for community banks.
  Mr. KILDEE. Mr. Speaker, I reserve the balance of my time.
  Mr. BARR. Mr. Speaker, I yield myself such time as I may consume.
  Let me once again thank the gentleman from Illinois for his tireless 
advocacy on behalf of our community financial institutions and 
providing some commonsense, basic relief to those institutions so that, 
instead of dealing with paperwork, they could actually better serve 
their customers and grow our local economies.


                             General Leave

  Mr. BARR. Mr. Speaker, I ask unanimous consent that all Members may

[[Page H1395]]

have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on this bill.
  The SPEAKER pro tempore (Mr. Walden). Is there objection to the 
request of the gentleman from Kentucky?
  There was no objection.
  Mr. BARR. Mr. Speaker, I reserve the balance of my time.
  Mr. KILDEE. Mr. Speaker, I will just close by reiterating what I said 
earlier. From time to time, it is clear that we can come together on 
solutions to problems that we come across in any regulation, in any 
aspect of the Federal Government. Even in areas where we might find 
broad disagreement on the importance of many of the protections that 
were put in place after the financial crisis, across the aisle, we can 
often find common ground around particular solutions; and, when we do 
that, we should act.
  I think that is why so many of us were pleased to see this 
legislation come forward to give us a chance to demonstrate that this 
is a step in the right direction, particularly supporting some of our 
smaller institutions. I support this legislation and urge my colleagues 
to do the same.
  I yield back the balance of my time.
  Mr. BARR. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Kentucky (Mr. Barr) that the House suspend the rules and 
pass the bill, H.R. 4725.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________