[Congressional Record Volume 168, Number 124 (Tuesday, July 26, 2022)]
[House]
[Pages H7150-H7152]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROMOTING NEW AND DIVERSE DEPOSITORY INSTITUTIONS ACT
Ms. WATERS. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 4590) to require the Federal banking regulators to jointly
conduct a study and develop a strategic plan to address challenges
faced by proposed depository institutions seeking de novo depository
institution charters; and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4590
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 ``Promoting New and Diverse
Depository Institutions Act''.
[[Page H7151]]
SEC. 2. STUDY AND STRATEGIC PLAN.
(a) In General.--The Federal banking regulators shall
jointly--
(1) conduct a study about the challenges faced by proposed
depository institutions, including proposed minority
depository institutions, seeking de novo depository
institution charters; and
(2) submit to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate and publish
publically, not later than 18 months after the date of the
enactment of this section--
(A) an analysis based on the study conducted pursuant to
paragraph (1);
(B) any findings from the study conducted pursuant to
paragraph (1); and
(C) any legislative recommendations that the Federal
banking regulators developed based on the study conducted
pursuant to paragraph (1).
(b) Strategic Plan.--
(1) In general.--Not later than 18 months after the date of
the enactment of this section, the Federal banking regulators
shall jointly submit to the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate and publish
publically a strategic plan based on the study conducted
pursuant to subsection (a) and designed to help proposed
depository institutions (including proposed minority
depository institutions) successfully apply for de novo
depository institution charters in a manner that promotes
increased availability of banking and financial services,
safety and soundness, consumer protection, community
reinvestment, financial stability, and a level playing field.
(2) Contents of strategic plan.--The strategic plan
described in paragraph (1) shall--
(A) promote the chartering of de novo depository
institutions, including--
(i) proposed minority depository institutions; and
(ii) proposed depository institutions that could be
certified as community development financial institutions;
and
(B) describe actions the Federal banking regulators may
take that would increase the number of depository
institutions located in geographic areas where consumers lack
access to a branch of a depository institution.
(c) Public Involvement.--When conducting the study and
developing the strategic plan required by this Act, the
Federal banking regulators shall invite comments and other
feedback from the public to inform the study and strategic
plan.
(d) Definitions.--In this Act:
(1) Depository institution.--The term ``depository
institution'' has the meaning given in section 3 of the
Federal Deposit Insurance Act, and includes a ``Federal
credit union'' and a ``State credit union'' as such terms are
defined, respectively, under section 101 of the Federal
Credit Union Act.
(2) Community development financial institution.--The term
``community development financial institution'' has the
meaning given in section 103 of the Riegle Community
Development and Regulatory Improvement Act of 1994.
(3) Federal banking regulators.--The term ``Federal banking
regulators'' means the Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the National Credit Union
Administration, and the Director of the Bureau of Consumer
Financial Protection.
(4) Minority depository institution.--The term ``minority
depository institution'' has the meaning given in section
308(b) of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
(e) Reduction.--
(1) In general.--Subparagraph (A) of section 7(a)(3) of the
Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is amended by
reducing the dollar figure described in such subparagraph by
$5,000,000.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on September 30, 2022.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
California (Ms. Waters) and the gentleman from Arkansas (Mr. Hill) each
will control 20 minutes.
The Chair recognizes the gentlewoman from California.
General Leave
Ms. WATERS. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from California?
There was no objection.
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I support H.R. 4590, the Promoting New and Diverse
Depository Institutions Act, sponsored by Representative Jake
Auchincloss, the vice chair of the Financial Services Committee.
Since the 1980s, we have seen steady consolidation in the number of
U.S. depository institutions from having roughly 33,000 banks and
credit unions in 1980 to less than 10,000 today. Over the last decade,
we have also seen a reduction of 3,300 branches by the four largest
banks leaving behind banking deserts where residents lack access to a
nearby branch for basic banking services.
I have also been troubled by the recent decline of roughly one-third
of all minority depository institutions, also known as MDIs, and more
than half of Black-owned banks since the 2008 financial crisis.
In December 2020, I was pleased to work with Ranking Member McHenry
and Senators Brown, Crapo, and Warner to reach a bipartisan deal to
provide $12 billion in capital investments and grants to shore up and
strengthen existing MDIs as well as community development financial
institutions, better known as CDFIs.
But I am still concerned that very few depository institutions,
especially MDIs, have been newly chartered in recent years while
banking deserts continue to grow. This bill would help address this
concern by requiring regulators to study this problem, request feedback
from the public, and develop a strategic plan so they can take steps to
encourage the creation of new banks and credit unions, including MDIs
and CDFIs.
H.R. 4590 also requires regulators to share with Congress any
legislative recommendations to further promote the creation of new
depository institutions, again, including MDIs and CDFIs.
So I thank Vice Chair Auchincloss for his work on this bill which
received bipartisan support in our committee.
Madam Speaker, I urge my colleagues to support H.R. 4590, and I
reserve the balance of my time.
{time} 2120
Mr. HILL. Madam Speaker, I yield myself such time as I may consume.
Since the Dodd-Frank Act was enacted, the number of community
financial institutions has steadily declined. Republicans know this
trend is due to increased regulatory and compliance burdens banks and
credit unions face that inhibit their ability to survive, let alone,
thrive. Republicans have consistently pushed for regulatory rightsizing
including tailoring regulation, not imposing one-size-fits-all
requirements.
H.R. 4950 directs the banking agencies to study ways to promote the
establishment of new banks and credit unions, including community
development financial institutions, CDFIs, and minority financial
institutions.
This bill requires the banking agencies to report to this body, the
Congress, on challenges faced by proposed depository institutions and
to develop a strategic plan to promote establishment of new financial
institutions.
The banking agencies will provide the Congress with recommendations
on how best to propose financial institutions and help them navigate
that regulatory process.
H.R. 4950 is a first step toward identifying and addressing the
challenges posed to the chartering of new banks and credit unions.
The fact is, Madam Speaker, encouraging the establishment of de novo
financial institutions will help fill the needs left by bank
consolidations and bank closures over the past decade. This will
increase banking options and competition to better serve families,
small businesses, and our local communities. The loss of local banks
and credit unions has disproportionately affected rural communities.
Republicans support efforts to better understand the challenges that
prospective de novo depository institutions face and identifying the
solutions to promote a greater number of new charters.
I urge my colleagues to support this bill, and I reserve the balance
of my time.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from
[[Page H7152]]
Massachusetts (Mr. Auchincloss), who is also the vice chair of the
Financial Services Committee.
Mr. AUCHINCLOSS. Madam Speaker, I will begin by thanking the
Chairwoman of the Financial Services Committee for her support of this
legislation and for her career-long support for financial access and
inclusion; and, also, my colleague from Arkansas' support to make this
a bipartisan initiative.
Madam Speaker, our economy has not always worked for all communities
equally. This is evident in the glaring wealth disparities for American
families emphasized in the 2019 survey of Consumer Finances Federal
Reserve Report.
One way to address these issues is to ensure access to diverse and
affordable financial services that can help individuals save money and
help small businesses raise capital. That is why I urge my colleagues
to vote for my bill, the Promoting New and Diverse Depository
Institutions Act.
Over the last several decades, there has been consolidation among
banks and credit unions. This has effectively limited the products
available to consumers and artificially driven up costs while closing
banking branches for people who already did not have many choices.
My bipartisan bill is the first step to increasing the supply of
banking services by directing banking regulators to work together to
address the challenges that new depository institutions, including MDIs
and CDFIs, face when applying for a charter.
Starting and maintaining a new bank or credit union is hard work. It
is the banking regulators' responsibility to measure and mitigate the
challenges that new banks face.
MDIs and CDFIs play a unique and vital role in our financial system
and often have a close relationship with their consumers. By investing
in and supporting MDIs and CDFIs, Congress can foster economic
opportunities for people who otherwise are unable to access affordable
banking services in a system that is already restricted and
restrictive.
My bill will help new banks, and in so doing, it will expand access
to affordable services for unbanked communities. I believe this bill is
a necessary step toward advancing economic equality in our country, and
I ask your help to ensure that all Americans have access to affordable
banking services regardless of their address.
Mr. HILL. Madam Speaker, let me thank my friend from Massachusetts
for his passion on this. I spent the better part of half of my career
in community banking, and I know the consolidation, how it has
impacted, particularly, rural counties that no longer have a banking
office.
And I also know how the regulatory burden has raised the immense
costs of trying to form a new de novo banking corporation. It is just
putting it out of reach of many, many groups of civic leaders,
entrepreneurs, local people and, certainly, those trying to form a
minority depository institution, or a CDFI.
So I commend my friend from Massachusetts for his work on this bill.
It does have bipartisan support. I urge my colleagues to support it.
In conclusion, Madam Speaker, I include in the Record a letter to the
Speaker and the minority leader, in addition to the chair and ranking
member of the House Financial Services Committee from the Independent
Community Bankers of America expressing their full support of H.R.
4590.
Independent Community
Bankers of America,
July 26, 2022.
Re Support for the Promoting New and Diverse Depository
Institutions Act (H.R. 4590).
Hon. Nancy Pelosi,
Speaker, House of Representatives,
Washington, DC.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives,
Washington, DC.
Hon. Kevin McCarthy,
Minority Leader,
House of Representatives,
Washington, DC.
Hon. Patrick McHenry,
Ranking Republican, Committee on Financial Services,
House of Representatives,
Washington, DC.
Dear Speaker Pelosi, Minority Leader McCarthy, Chairwoman
Waters, and Ranking Member McHenry:
On behalf of community banks across the country, with
nearly 50,000 locations, I write to thank you for scheduling
floor consideration of the Promoting New and Diverse
Depository Institutions Act (H.R. 4590), sponsored by Rep.
Jake Auchincloss, and to express our support for this
legislation. ICBA urges all Members of the House to vote YES
on H.R. 4590.
The Promoting New and Diverse Depository Institutions Act
requires the Federal banking regulators to conduct a joint
study to assess the challenges faced by proposed depository
institutions, including proposed minority depository
institutions (MDIs), seeking de novo depository institution
charters and to provide legislative recommendations to help
these proposed institutions successfully obtain charters.
There has been a dearth of de novo charters in the past
decade. An infusion of new charters is needed to offset
consolidation in the banking sector and create a competitive
landscape that will benefit consumers and small businesses
alike. Notably, new community bank charters, including new
MDI charters, are needed to provide access to capital and
banking services that play a pivotal role in reaching
unbanked populations and underserved communities across the
nation.
Concrete, actionable proposals are needed to turn the tide
of stagnant de novo bank formation. ICBA supports an array of
measures, such as phasing in capital standards for de novo
banks over a period of three years and allowing for greater
flexibility to modify the de novo business plan as conditions
warrant. Start-up capital is often the greatest impediment to
forming a new bank, and these provisions, among others, would
help spur the creation of de novo charters, including MDIs.
Thank you for your consideration. ICBA looks forward to
working with you to advance H.R. 4590 into law.
Sincerely,
Rebeca Romero Rainey,
President & CEO.
Mr. HILL. Madam Speaker, I yield back the balance of my time.
Ms. WATERS. Madam Speaker, I yield myself the balance of my time.
H.R. 4590 is supported by a wide range of stakeholders, including
California & Nevada Credit Union Leagues, Community Development Bankers
Association, Inclusiv, Independent Community Bankers Association, and
many others.
I urge my colleagues to support this bill, and I yield back the
balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from California (Ms. Waters) that the House suspend the
rules and pass the bill, H.R. 4590, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________