[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.
____________________