PACB State Policy Priorities 1.Protecting Seniors from Financial Exploitation PACB has actively pushed for changes to the Commonwealth’s Older Adult Protective Services Act (OPSA). As over 5 million seniors are victims of financial exploitation with the perpetrator is a family member or caretaker.
In order to protect these vulnerable customers and members of our communities, PACB has advocated for and pushed for legislation which would empower community banks and provide immunity to our members:
To report suspected exploitation to an adult associated with the senior or to law enforcement.
Disclose or report a transaction associated with an account where a senior is suspected to be a victim of financial exploitation to the Department of Aging and the Area Agency on Aging.
Deny a transaction which is suspected to be financially exploiting a senior
2. Regulatory Reform In order to foster economic growth in our communities PACB supports making changes to Pennsylvania’s burden regulatory system. This includes the following proposals:
House Bill 288, sponsored by Rep. Tim O’Neal (R-Washington) would require each state agency to have a regulatory compliance officer to help entities comply with state rules. This bill passed the House by a vote 106-95 and now awaits consideration before the Senate Intergovernmental Operations Committee.
House Bill 72, sponsored by Representative Dawn Keefer(R-York) would create a state level Reins Act. This would require an economically significant regulation, which is defined as an economic impact of $1 million or more, to be approved by the legislature. This legislation passed the House by a vote of 108-93 and now awaits consideration before the Senate Intergovernmental Operations Committee.
House Bill 139, sponsored by Representative Greg Rothman(R-Dauphin) would require agencies to create an online tracking system for applicants applying for a permit with the agency. This legislation passed the House by a vote of 113-88 and now awaits consideration before the Senate Intergovernmental Operations Committee.
House Bill 939, sponsored by Representative Kate Klunk (R-York) would create an Independent Officer of the Repealer to report on outdated regulations and recommend to the legislature their repeal. This legislation passed the House by a vote of 111-90 and now awaits consideration before the Senate Intergovernmental Operations Committee.
Senate Bill 32, sponsored by Senator Kristin Phillips-Hill(R-York) is a comprehensive proposal which would:
Requires for every new regulation the agency would repeal two outdated regulations.
Create the Independent Office of the Repealer
Create a transparent permit tracking process online for state agencies
Establish a regulatory compliance officer within each state agency.
3. Financial Literacy At a time when more than 60% of Americans are currently living paycheck to paycheck and are taking on debt at a rate not seen since right before the Great Recession, PACB supports legislation which would teach students financial literacy.
Teaching students financial literacy prior to graduation raises, on average, an individuals credit score by 20pts along with a general improvement in financial stability. To this effect, PACB supports:
Senate Bill 1243: sponsored by Senator Chris Gebhard (R-Lebanon) which requires as a condition to graduate students to receive financial literacy. In order to ensure students, receive quality instruction it also instructs the state to develop model curriculum for school districts to use.
At the same time, the bill would require school districts provide continuing education opportunities for teachers to learn financial literacy so they are prepared to teach their students.
4. Tax ReformAs the Commonwealth continues to recover economically from the pandemic and inflation, PACB has advocated for tax reforms which would not only help our customers, but our members. To this effect, we are advocating for the following tax changes
Reducing the Mutual Thrift Institution Tax which is imposed at 11.99% which is higher than the CNI prior to the changes signed into law by Governor Wolf this year.
Enacting into law, clear statutory clarifications regarding how remote employees file personal income taxes. Particularly, making it clear that a remote worker for a Pennsylvania company doesn’t owe income taxes to the Commonwealth if they work outside the state.
5. Limited Civil Liability Protections Pertaining to COVID-19The COVID-19 pandemic is an once century event which no one could have possibly anticipated prior to March 2020. In light of this fact PACB supports:
House Bill 605 sponsored by Representative Torren Ecker (R-Adams) would provide any business entity including community banks with limited civil immunity pertaining to COVID. This immunity would only be effective if a bank or entity had followed all applicable guidance for protecting customers and employees. House Bill 605 passed the House 107-94 and currently awaits a vote in the Senate Judiciary Committee.
PACB's Federal Legislative Priorities for the 117th Congress
1. Closing the Industrial Loan Corporation Loophole Over the past several years, we have seen several applications for commercial companies to start their own bank by applying for an Industrial Loan Charter (ILC). PACB believes that the mixing of commercial and banking interests under the same corporate umbrella poses a significant risk to the American financial system.
As a result of the industry’s advocacy H.R. 5912 which contained our language to address the loophole was passed by the House Financial Services Committee. The first time a bill on the issue has moved on the issue in 15 years.
2. Overdraft Protection The Consumer Financial Protection Bureau made it clear at the beginning of the year that they viewed NSF fees or fees associated with an overdraft program as “predatory”. These fees in their words were “junk fees”.
In response to this damaging and false narrative PACB has contacted member organizations to gathering data to push back with the agency and lawmakers. Read our public comment letter here.
3. SBA Direct Lending Proposed as part of the original Build Back Better Act there have been attempts during the 117th Congress to return the SBA into the practice of directly lending, up to $150,000.
This program, if funded and authorized by Congress would reduce the access to credit while being susceptible fraud. Rather than competing with community banks, we are advocating with the SBA and lawmakers for:
Approval of more 7A Lenders by the SBA
Passage of S. 3382 sponsored by Tim Scott (R-S.C.) to prevent direct loans from the agency
4. Expanding the Durbin AmendmentAs part of the Dodd-Frank Act, Senator Dick Durbin (D-IL) fundamentally changed financial industry by setting artificial caps on interchange fees. This was designed to help customers, small businesses while protecting community banks.
Since 2010, we have seen the well-intentioned efforts of Senator Durbin failed to meet their objective as analysis of the law from the Federal Reserve of Richmond explained that a significant percentage of retailers who saw savings still raised their price following passage of the law. In told only 1% of “savings” were passed onto the consumer while community banks saw significant cost increases despite claims the law would not affect them.
Given the historical failure of the Durbin Amendment and its negative impact on consumers PACB opposes further government intrusion into credit routing under S.4674 sponsored by Sen. Durbin (D-IL & Sen. Marshal (R-KS).
5. Public Banking While the 117th Congress has been marked a drop in legislative action as partisan rancor grips the legislative branch one issue has seen an increase in activity. This issue is the problematic proposal for various public banks. These proposals and our position are summarized below:
Postal Bank: Senators Gillibrand (D-NY) and Senator Sanders (D-VT) are pushing for S.4164 to be included in FY 2022 discussions. At the heart of this push is federal funding to start a pilot program for postal banks. PACB adamantly opposes this proposal as public banks have reduced in number from 29 to 3 over last 100 years as they are not viable. This decision would place federal taxpayers at risk and distract the post office from its core mission.
National Climate Bank: S. 283 sponsored by Senator Markey (D-MA) would establish a national climate bank to finance clean energy products and services. PACB opposes this proposal as banking should be left to a competitive and private market.
National Infrastructure Bank Act: H.R. 3339 sponsored by Rep. Danny Davis (D-IL) would establish a national infrastructure bank to transportation and other infrastructure related projects. Similar to S.283 PACB opposes this proposal as banking should be left to a competitive and private market.
6. Cannabis BankingAs more than 35 states currently have legalized medicinal use of cannabis or recreational use of cannabis, we have seen a drastic increase in the formation of legal cannabis-related legal businesses (CRB’s) begin to grow across the country. Pennsylvania has seen a significant increase in the investment and formation of CRB’s. The inability to access the financial system forces CRB’s to operate primarily in cash which negatively impacts the community.
The dissonance between federal and state law is untenable as stated by Justice Thomas. In order to address this problem PACB supports providing banks safe harbor under federal law for any financial institution following state law and regulations for serving CRB’s. For this reason, we support the following:
Safe Banking Act: H.R. 1996 sponsored by Rep. Ed Perlmutter (D-CO) and S.910 sponsored by Senator Jeff Merkely (D-OR). Each bill would provide safe harbor for banks following state law on cannabis banking
7. H.R. 2547 This legislation sponsored by Chairwoman Maxine Waters (D-CA) of the House Financial Services would change the federal law for debt collection by overturning the unanimous SCOTUS ruling in Obduskey. PACB opposes this bill as it will make it more expensive for consumers to access credit and increase the cost for debt collection.
8. Pushing Back on Credit Union Purchases of Community BanksIn recent years we have seen a disturbing trend where credit unions are purchasing community banks. This creates issues in the funding for the FDIC fund as the purchase of community banks by credit unions makes taxable assets which pay into the fund to nontaxable assets.
PACB supports legislation, in the absence of broader legislation pertaining to credit unions, which would require credit unions to a significant fee. The fee would be assessed on the assets of any community bank purchased by the credit union.