[Congressional Record (Bound Edition), Volume 160 (2014), Part 5]
[House]
[Pages 6896-6898]
[From the U.S. 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''.

[[Page 6897]]

       (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?
  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

[[Page 6898]]

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.
  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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