Verdier, Steve, Ence, Ron, Merski, Paul, Scanlan, Mark, Kanoy, Erin, Independent Banker
A roundup of banking topics for the 109th Congress
Even as Congress moved toward a final resolution of ICBA's deposit insurance reform priority, a broad range of other legislative issues remain to be resolved in 2006. ICBA's challenge is to work with both parties in a closely divided Congress to achieve the best outcome for community banks and their customers. Fortunately, many of our issues do not divide members of Congress philosophically or by party. Even in potentially divisive areas, ICBA has successfully steered between the ideological extremes.
The following articles outline the history and outlook for these issues.
* Regulatory Relief: The House Financial Services Committee has included five provisions from the ICBA-inspired Communities First Act (CFA) in its broader regulatory burden relief bill. We will work with the Senate Banking Committee to add those and other provisions to its bill.
* Wal-Mart: ICBA is working with its congressional allies to oppose Wal-Mart Stores Inc.'s application for a Utah industrial loan company (ILC) charter. We also continue to support-as a first step-the Gillmor/Frank amendment that would prevent new ILCs owned by commercial firms from gaining new banking powers.
* Credit Unions: ICBA and the other bank trade associations are united in shining a spotlight on credit union tax exemption and opposing credit unions' attempt to expand their business lending powers and reduce their capital requirements.
* Taxes: Expiring tax cuts, elimination of the est ate t ax and the t ax relief measures in the Communities First Act top our 2006 tax agenda.
* Government-Sponsored Enterprise (GSE) Reform: ICBA will continue to vigorously defend the Federal Home Loan Bank (FHLBank) System in the context of bills to reform the regulation of the housing GSEs.
* Data Security: ICBA is working with the financial services industry to provide workable protections for community bank customers' personal information.
* Hurricane Relief: Hard-hit communities are looking for a hand up from the federal government. We will work for solutions that help community banks play their historic role in community redevelopment.
* Agriculture: Two key issue areas will dominate our attention-the next farm bill and Farm Credit System (FCS) encroachment.
CFA Initiative Gains Steam
The regulatory burden on community banks is a threat to the future of our industry. Dallas Federal Reserve economists wrote that the regulatory burden on community banks threatens their independence. Recent statutory and regulatory changes have greatly increased this burden.
At the same time, many community bankers are struggling to compete with tax-subsidized credit unions, which offer them a 50 basis point cost of funds advantage over community banks, according to an independent study by the Tax Foundation.
That is why ICBA, working closely with the Independent Bankers Association of Texas and other state community bank associations, developed the Communities First Act, a legislative initiative that addresses both the mounting regulatory burden and the growing competitive inequity with tax-subsidized credit unions (visit www.icba.org, for a complete list of its features). CFA, introduced in the House by Rep. Jim Ryun (R-Kan.), attracted more than 80 co-sponsors in its first six months. A companion bill was introduced in the Senate by Sens. Sam Brownback (R-Kan.), Pat Roberts (R-Kan.) and James Inhofe (R-Okla.). Sen. Chuck Hagel (R-Neb.) has added his name to the bill.
CFA serves as a marker for community bank relief and provides community bankers and our congressional allies a legislative rallying point for a variety of regulatory and tax relief proposals. This strategy is already working.
The Financial Services Regulatory Relief Act (H.R. 3505), which passed the House Financial Services Committee, includes five provisions taken directly from the CFA. …