By U.S. Sen. Angus King
America’s small banks and credit unions didn’t cause the recession of 2008, yet they’re being regulated as if they did. These misplaced regulations are slowing economic growth, and Congress needs to provide our small financial institutions with some relief.
I am proud to add my voice to the growing chorus in Congress that is working to identify outdated, poorly-tailored, and inefficient banking regulations and overturn or adjust them. I introduced the RELIEVE Act with a bipartisan coalition of Senators that includes Deb Fischer (R-Neb.), Mark Warner (D-Va.), and Jon Tester (D-Mont.). By targeting just three provisions that affect community banks and credit unions – two of which have already passed the U.S. House of Representatives – the RELIEVE Act would provide immediate and meaningful regulatory relief for our small banks and credit unions.
On September 16, the Senate Committee on Banking, Housing, and Urban Development held a hearing on the state of small banks. This important hearing had one obvious takeaway: providing regulatory relief for small financial institutions is a bipartisan issue. There are more than a dozen bipartisan bills sitting in the Senate Banking Committee that, like my RELIEVE Act, aim to help small banks and credit unions.
Targeted, technical fixes like those offered by the bill are an easy way to free up critical resources at community banks and small credit unions. With fewer regulatory burdens, these institutions can spend less on their compliance staffs and more on efforts to expand access to credit in their local communities.
In fact, I regularly hear stories of frustration from Maine bankers about how the slow and steady accumulation of federal regulations gets in the way of their ability to be strong sources of credit to their customers. The recent Senate Banking Committee hearing gives me hope that more elected officials are beginning to listen to these voices from Main Street America, and may even soon join the effort to do something about it.
While passing bills like the RELIEVE Act would ease some regulatory burdens for our community banks and small credit unions, I am convinced that we need to adopt a comprehensive approach to banking regulatory reform. It may be time for a review of the structure and process that got us to this point of excessive regulations in the first place, while maintaining safeguards that prevent us from inviting another financial crisis.
Small banks and credit unions are important sources of capital that support Maine businesses and Maine families – and they ultimately help strengthen our communities. But an unnecessary maze of regulations is preventing these important engines of economic development from running as smoothly as they can. I believe that the RELIEVE Act is an important first step in clearing some of those obstacles.