2016 Agenda for America’s Hometown Banks


A Level Playing Field and Charter Choice

A diverse and safe banking sector must provide charter flexibility while also ensuring that all financial services providers compete on a level playing field.

  • Nonbank competitors.

    Recognizing the growth of fintech, online marketplace lending and mobile payment platforms, educate policymakers about the importance of consistent regulatory treatment and consumer protection regardless of what kind of company provides the services.

  • Credit unions.

    Refocus credit unions on their core mission while pursuing equal tax and regulatory treatment for those that do not pursue that mission.

  • Farm Credit System.

    Recognizing the specific role serving young, beginning and small farmers that Congress established for the FCS in granting it tax-favored status, eliminate this tax-favored and government-sponsored status when it has acted outside of its mission.

  • Savings institutions.

    Provide more charter flexibility and capital options for thrift institutions, including mutual banks.

  • Subchapter S.

    Protect S-corp banks from arbitrary disadvantages due to the Basel III capital and other rules.

Remove Impediments to Serving Customers

Excessive regulation and overzealous enforcement can be disincentives to providing customers the products and services they are asking for, limiting banks’ flexibility in tailoring products to meet customers’ needs.

  • Mortgage rules.

    Reform certain aspects of mortgage regulations that have demonstrably raised costs and prevented banks from flexibly serving their customers and market segments.

  • Capital and liquidity.

    Free up bank resources devoted to meeting overly burdensome and unnecessarily complex capital requirements to increase lending.

  • Fair lending.

    Ensure that fair lending laws are applied in a coordinated fashion and so as to not tie banks’ hands from tailoring products to meet individual customers’ and markets’ needs.

  • AML/BSA.

    Limit burdens associated with BSA compliance and reporting, as well as eliminate potential sanctions for banking legal businesses that limit incentives to serve all kinds of customers.

  • Overdraft protection.

    Preserve banks’ ability to serve customers who would otherwise seek out riskier nonbank providers.

  • Outdated regulations.

    Vigorously review, identify and roll back outdated or unnecessary rules and provisions.

  • Costs of other regulations.

    Continue engaging policymakers about the potentially negative consequences of other regulatory changes to employment law, loan loss accounting, fiduciary duty standards and other issues.

Protect the Payments System

We must maintain banks’ responsibilities as stewards of the payments system within a regulatory environment that promotes innovation, consumer protection, system integrity and a level playing field for all involved.

  • Consumer protection and system integrity.

    Ensure that all participants—banks and nonbanks—are subject to the same rules and oversight in order to protect consumers and discourage overall risk to the system.

  • Innovation.

    Promote a secure regulatory system that supports bank innovation in payments, and eliminate artificial price controls, such as interchange fee caps, that impede innovation.

  • Fed engagement.

    Encourage greater engagement by the Federal Reserve in ensuring equal access, equivalent regulation and an environment of innovation founded in a free market.

Cybersecurity and Data Breaches

Banks employ high standards of cybersecurity to protect their customers, while other parties that experience breaches of customer data impose enormous costs on banks and their customers. The balance of responsibility must shift. Banks and the federal government must also continue to build on their strong public-private partnership, sharing resources to combat the ever-present international threat of cyber terrorism.

  • Shared responsibility.

    Ensure that all parties share the same standards and accountability for protecting customer information and notifying the public after a breach.

  • Liability.

    Identify and hold the breached party responsible for costs associated with the breach.

  • Robust culture of security.

    Continue expanding public-private efforts to fight cyber threats by facilitating collaboration, information-sharing and self-reporting of internal weaknesses without fear of regulatory sanctions or reputation risk. Support strong efforts by law enforcement to prosecute wrongdoers.

Regulation Appropriate to Business Models

Recent dramatic expansions in regulation have placed overwhelming burdens on many banks, greatly impeding their ability to serve their communities. A long-term vision for regulation is needed that tailors rules to suit the industry’s diverse business models and risk profiles. Any new model for regulation must provide substantial regulatory reductions without impeding the flexibility to serve evolving customer needs.

  • Short-term fixes.

    Continue to seek solutions to immediate regulatory challenges, including legislative remedies that deem loans held in portfolio as “qualified mortgages” and exempt highly capitalized banks from Basel III calculations.

  • Distinctive characteristics.

    Create a viable model for differential regulations that is risk-based and focused on business models.

  • Arbitrary thresholds.

    Remove artificial regulatory asset thresholds not corresponding to risk and business model.

  • Regulatory process.

    Pursue a more balanced and efficient supervisory process that promotes bankers’ ability to serve diverse and unique customer needs—as well as exam review and appeal channels with independent ombudsmen across regulatory agencies.

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Source by aba