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Congressman Williams’ Community Bank Bill Passes Financial Services Committee

Jan 18, 2018

WASHINGTON, DC – U.S. Congressman Roger Williams (R – Austin), who serves as a vice chair on the House Committee on Financial Services, introduced H.R. 1264, the Community Financial Institution Exemption Act, which passed out of the full committee on Thursday morning.

“Community banks and credit unions are suffering under the burdensome rulemaking of the Consumer Financial Protection Bureau (CFPB). Congress recognized the importance of not applying a one-size-fits-all approach to banks, which is why Section 1022 of Dodd-Frank allowed for the exemption of small institutions from new regulations based on size,” said Rep. Williams. “However, the CFPB has failed to exercise the authority granted to them in statue. For this reason, I introduced H.R. 1264, the Community Financial Institution Exemption Act. My bill will enforce the intended purpose of Section 1022, and require the Bureau to exempt community financial institutions from CFPB rulemaking unless it makes a detailed, written finding with input from the appropriate federal banking agency.”

Williams’ remarks below:

“Thank you, Mr. Chairman.

“Not all banks are the same, and not all banks should be treated the same. One size, believe it or not, does not and should not fit all.

“Since the establishment of the CFPB in the Dodd-Frank Act, and the cascade of regulations and rulemakings that have followed in the six years since, community banks and credit unions have been crushed under the weight of unnecessary compliance.

“The cost to Main Street has been significantly damaging; it’s as simple as that. Community financial institutions - often subjected to the same rules and regulations as banks much larger than themselves - have increasingly found themselves unable to offer the same variety and quality of services to their customers as they had before.

“Compliance costs money; there are burdensome expenditures associated with complex audit and legal requirements. Further, those affected by rules and regulations see their revenue streams diminish because the products they used to offer their customers now cost too much. These small, local institutions should not continue to have their businesses and customers hurt by the effects of compliance.

“The worst part of all of this? Dodd-Frank allowed a way out for these community institutions. This way out is seldom brought out of the regulatory cupboard of the CFPB for use. Under Section 1022 of Dodd-Frank, the CFPB has the ability to exempt smaller institutions from their rulemakings, which are intended for much larger banks.

“Why won’t the CFPB exercise this authority? Because bureaucratic overreach is pervasive within this unconstitutional bureau, and counting on them to do the right thing has come and gone.

“Rather than letting the CFPB continue to maintain the status quo of ignoring already available relief, my bill grants immediate relief for those ignored by the CFPB by exempting community financial institutions with less than $50 billion in assets from all rules and regulations issued by the CFPB.

“If the CFPB really feels that subjecting community institutions to their rules is the correct action, the bill even gives the CFPB the power to receive written permission from federal banking agencies to revoke this exemption for specific rules or regulations.

“I included this provision because, at a minimum, if the CFPB continues to regulate small institutions, it would be helpful to know why the CFPB is choosing to include certain financial institutions when they otherwise should be exempt.

“Mr. Chairman, community financial institutions are essential to Main Street America, and they are essential to small businesses.  I urge my colleagues on both sides of the aisle to support this important piece of legislation.”

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