Every year PACB and community bankers from all over the Commonwealth of Pennsylvania make the annual trek to Washington DC to advocate for regulatory relief, receive educational offerings and hear from regulators as part of the Independent Community Bankers of America’s (ICBA) Capital Summit. But this year’s ICBA Capital Summit felt very different.
Scheduled a month earlier than usual, this year the Capital Summit had a special energy about it. Held in the peak of cherry blossom season and on the cusp of realized regulatory relief, the scent of cherry blossoms and momentum was wafting through the air.
It had been a long winter.
SPRINGTIME, AFTER A LONG WINTER
Fresh off the US Senate’s passage of S.2155 the Economic Growth, Regulatory Relief & Consumer Protection Act in March, community bankers from across the country came to implore their members of Congress to pass this bill.
Community bankers have been laying the groundwork for the eight years since the passage of Dodd-Frank. Every day of every year post-passage, bankers have faced new regulations, unnecessary and costly compliance requirements, and consolidation. Those who made it through did so with a certain resilience, silently serving their communities in earnest.
Every year, they advocated for relief, writing letters, making phone calls, hosting roundtables, telling and re-telling their real-life stories of the crushing burdens they have faced under Dodd-Frank, only to go back home to more regulation and frustration, knowing that because of Dodd-Frank, they could not provide for their customers like they once did. It must have felt like they were toiling away in vain, but in reality, their hard work did what it was supposed to do. Lawmakers began to understand.
Community bankers and like-minded legislators labored each year to pass regulatory relief measures, only to see them go nowhere. The Administration change in 2017 brought with it a new way of thinking, a remaking of the federal financial regulators and a cry for change.
In 2017, the House of Representatives set the tone, passing Chairman of the House Financial Services Committee Jeb Hensarling’s Financial CHOICE Act, a comprehensive mega-package of regulatory relief measures for financial institutions. Stymied in the Senate, CHOICE Act didn’t have the votes to pass.
Then, in a historic bipartisan effort, a group of Senators (13 Republicans and 12 Democrats) dedicated to relief for smaller financial institutions created S. 2155, the Economic Growth, Regulatory Relief & Consumer Protection Act.
S.2155, a product of years of hard work across party lines, provides qualified mortgage status for all loans held in portfolio for institutions with assets under $10 billion, exemption from escrow; simplifies capital requirements; provides for short form call reports, and exempts banks who make 500 or fewer mortgages per year from new more burdensome Home Mortgage Disclosure Act (HMDA) reporting requirements. It is significant regulatory relief.
After two weeks of debate, S.2155 passed the Senate 67-31, an extraordinary feat in and of itself.
Almost 200 community bank employees from Pennsylvania alone made calls to our senators, asking for their support of S.2155. Senator Pat Toomey voted in support of the legislation, Senator Bob Casey voted against.
The bill’s next stop, the House of Representatives, which might seem like a slam dunk. After all, House members had passed an even more comprehensive and what the Elizabeth Warrens of the world might call “controversial” bill, the CHOICE Act. Members of the Senate signaled that passing S.2155 was difficult and if it was bombarded with amendments in the House, they couldn’t guarantee its passage. President Trump noted that he would sign S.2155 into law if it came to his desk with no changes.
House members have an important decision to make, pass S.2155 as it is currently written or fight for more and risk losing the regulatory relief altogether.
Community bankers more than any other time felt the importance of their presence in Washington DC. Stepping up to raise their voices above hundreds of lobbyists and around House and Senate political battles, sharing their message directly with their members of Congress: We need relief. We need S.2155, now!
PENNSYLVANIA’S OWN…LEADING ICBA CAPITAL SUMMIT
Tim Zimmerman, Chairman ICBA
Pennsylvania community bankers were thrilled to see one of their own wielding the gavel at the Capital Summit. Tim Zimmerman, CEO of Standard Bank PASB of Monroeville, PA was elected Chairman of the Independent Community Bankers of America (ICBA) in March 2018.
A 35-year veteran of community banking and difference-maker in his own right, one of Tim’s top priorities is to see regulatory relief enacted this year.
“Part of my hope is to continue the work of ICBA and do even more to help community banks get back the ability to make decisions that are customer-oriented and not have to follow very restrictive and prescriptive methods, so that we can help as many people the best way we know how,” said Tim.
Tim presided over the ICBA sessions reminding community bankers to use their voice, to mentor others and “commit to seeking out a fellow community banker who isn’t currently advocating and encourage them to participate.”
US Senator Pat Toomey
Pennsylvania’s Senator Pat Toomey served as keynote speaker for the Tuesday morning ICBA breakfast, inspiring community bankers as they embarked for their respective states’ Hill visits. As Chairman of the Subcommittee on Financial Institutions and Consumer Protection, Senate Banking Housing and Urban Affairs Committee, Senator Toomey has been a true leader when it comes to advocacy for regulatory relief.
Senator Toomey advocated for and voted for S.2155. That morning he thanked community bankers for being there and encouraged them to push as hard as they can for its passage in the House.
Senator Toomey touted the GOP-passed Tax Cuts and Jobs Act, saying tax reform and regulatory relief will lower the cost of capital, the gift that keeps on giving to the economy and suggested that we have turned the corner in the regulatory environment.
Comptroller of the Currency, Office of Comptroller of the Currency (OCC), Joseph Otting
Hearing from the newly minted Comptroller of the Currency, Joseph Otting was one of the summit highlights. A former banker himself, Otting called community bankers “dream-makers.”
He thanked the community bankers for what they do calling them the pillars of their communities and the building blocks for small business in America.
“Small, local banks remain the heart of their communities, and we need to ensure that they remain part of the broader banking landscape in the future. To do this, we need greater flexibility to tailor regulatory requirements for community banks that do not pose the same risks as their larger counterparts. One way to move forward is to return to a simpler capital structure for small banks.” says Otting.
Otting touted his top three policy objectives for the Office of Comptroller of the Currency (OCC): Bank Secrecy Act (BSA) Modernization; reexamination of the Community Reinvestment Act (CRA) and bringing back small dollar lending.
Acting-Director, Consumer Financial Protection Bureau (CFPB), Mick Mulvaney
Mick Mulvaney, a former Congressman and state legislator, is Director of the Office of Management and Budget and Acting Director of the CFPB.
As colorful as his brightly striped socks, Mick Mulvaney took the community bankers by storm acknowledging Dodd-Frank’s disproportionately harmful effects on community banks and stating emphatically that regulators should enforce the laws written by Congress not make laws, a viewpoint that seemed anathema to the edicts of CFPB’s motus operandi of the recent past.
Appointed by President Trump as Acting-Director after the abrupt departure of former CFPB Director, Richard Cordray, Mick Mulvaney’s term is required to expire in June. The White House must nominate a permanent director, but can allow the acting director to remain until the confirmation takes place.
SAYING GOODBYE TO CAM FINE
ICBA’s long time President/CEO, Cam Fine, retired this month. Cam served at ICBA’s masterful chief lobbyist and advocate for over fifteen years. As best said by Troy Campbell, President/CEO of Altoona First Savings Bank, “Cam Fine has the unique combination of being able to make you laugh and feel like jumping into a dog fight at the same time. Every time you hear him speak, you leave inspired.”
Fine addressed the members for a final time at the capital summit. He reminded the members that the strength of ICBA was them and that every man and woman there was a leader.
Lastly, he implored the community bankers to push S.2155 over the finish line. The passage of S.2155 would be an amazing retirement gift, capping off a career dedicated to the preservation of community banking.
ICBA Chairman Tim Zimmerman and incoming President/CEO, Rebeca Romero-Rainey presented Fine with a plaque honoring his service.
Rebecca Romero Rainey, a third generation community banker has taken over the reins.
PASS S.2155, NOW
Finally, on “Hill Day” community bankers roamed the halls of Washington to convey a message only they could deliver effectively to their hometown congressmen and women, pass S.2155 “as is” and do it immediately.
In late April, Chairman Hensarling signaled that he is willing to pass S.2155 “as is” as long as there is a path for some of the other House-passed regulatory relief legislation.
On May 8th, House Speaker Paul Ryan announced that the House and Senate have reached an agreement and the House will take up S.2155 for a vote.
Passage of S. 2155 would be everyone’s victory; local communities, customers and community bank employees who sank their hearts and souls into every volunteer hour, every community project, and every customer interaction.
To be continued…
On May 22, 2018 the US House of Representatives passed S.2155 with bipartisan support (258-159). Thank you to our Pennsylvania House Delegation members: Congressmen Lou Barletta, Ryan Costello, Brian Fitzpatrick, Mike Kelly, Tom Marino, Scott Perry, Keith Rothfus, Bill Shuster, Lloyd Smucker, and Glenn Thompson for voting in favor of the bill and for their loyal support of community banking.
Finally, on May 24, 2018, after a truly historic effort by all, President Donald Trump signed S.2155 the Economic Growth, Regulatory Relief & Consumer Protection Act into law.
Thanks again to ICBA, Tim Zimmerman, Senator Pat Toomey, Chairman of the Subcommittee on Financial Institutions and Consumer Protection, Senate Banking, Housing & Consumer Affairs Committee and Congressman Keith Rothfus, and the House Financial Services Committee for their leadership and advocacy on this bill and many other regulatory relief measures.
Most importantly, thank you to community bankers for doing their best to serve their customers every day.