WASHINGTON, DC – Tuesday, February 10, 2015 – U.S. Senator Richard Shelby (R-Ala.), Chairman of the United States Senate Committee on Banking, Housing, and Urban Affairs, today delivered the following remarks during a full committee hearing on “Regulatory Relief for Community Banks and Credit Unions.”
The text of Chairman Shelby’s remarks, as prepared, is below.
“This week, the Committee begins an examination of potential changes to the current regulatory structure.
“Today we will focus on regulatory relief for smaller financial institutions. In the near future we will continue this examination by focusing on unnecessary statutory and regulatory impediments across the financial services spectrum.
“While there are some who continue to argue that current law is beyond reproach there are many on both sides of the aisle that believe improvements can and should be made.
“Today, we will hear from regulators on some of the lessons they have learned and how best to overcome some of the challenges they have encountered.
“Although we may not agree on many things, I believe that we can all agree that community banks and credit unions play a vital role in our local economies.
“629 counties in the United States are served only by a single community bank.
“Six million U.S. residents depend on small financial institutions for their daily banking needs.
“These financial institutions use their knowledge of local communities to lend to small businesses, which are the engine of job creation in America.
“A recent survey found that community banks provide 48% of small-business loans issued by U.S. banks.
“That number is even higher in rural areas where small financial institutions account for 52% of small business and farm loans.
“These financial institutions are able to forge relationships with local consumers that enable them to develop products tailored to the specific needs of their communities.
“Unfortunately, we have heard that innovation tailored for Main Street is being smothered by unnecessary regulations originally designed for Wall Street.
“Some of the regulators before us today have testified in the past that small financial institutions did not cause the financial crisis.
“Nonetheless, added regulations have caused hundreds of banks and credit unions to simply stop offering certain products. They are instead forced to spend valuable resources on compliance staff.
“A survey by the Federal Reserve and the Conference of State Bank Supervisors found that compliance costs have increased for 94% of community banks.
“It is time to reverse this trend.
“Today, we expect to hear recommendations from regulators on ways to provide regulatory relief for smaller financial institutions.
“Past Committee hearings on this issue have demonstrated bipartisan understanding that something must be done in this area.
“Discussion today will build upon those efforts by providing specific recommendations for both regulators and Congress to implement. I believe that we are long overdue for regulatory relief for small financial institutions.
“I look forward to working with Ranking Member Brown and the members of this committee to advance legislation that will benefit community banks and credit unions across the country. Thank you.”