Mar 06 2018
WASHINGTON – Today, the Senate voted 67-32 in favor of starting debate on S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, bipartisan legislation to grow the economy and protect consumers that was negotiated in part by Sen. Mark R. Warner (D-VA). Today Sen. Warner called for swift passage of the legislation, which will provide targeted relief for community banks and credit unions so they can improve access to capital and increase economic prosperity in the Commonwealth.
The legislation addresses some of the unintended consequences of the Dodd-Frank Act in order to make it easier for smaller community banks and credit unions to lend to Virginia businesses and families, which is good for households and the economy.
“The Senate is on the verge of passing major bipartisan legislation aimed at providing relief for small community banks, credit unions, and the customers they serve. As someone who helped put together the Dodd-Frank legislation, I know there are areas where we can help improve access to capital for consumers, farmers, and small businesses so they can grow the economy and create jobs,” said Sen. Warner. “Virginia’s community banks and credit unions did not cause the financial crisis, and they should not be held back by regulations intended for the big banks. I look forward to seeing the Senate pass this package of bipartisan measures that will provide relief for Main Street, strengthen consumer protections, and keep Wall Street accountable.”
Following the 2008 financial meltdown, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to crack down on the worst Wall Street abuses and institute strict regulations to prevent another crisis. Sen. Warner played an important role in negotiating and drafting major portions of this legislation, which created new safeguards to protect our financial system and hold Wall Street accountable.
However, as with any major reform, the law also had some unintended consequences. Virginia has lost over a quarter of its community banks and nearly a third of its credit unions since Dodd-Frank was passed. In some cases, the law resulted in unnecessary and burdensome regulations on credit unions and small community banks that made it harder for them to lend money to help local businesses grow and create jobs.
“As a credit union, we have to adhere to the same regulations as large banks do. But we have to do it with a much smaller base – we only have 10,000 members and 20 employees – adhering to the same regulations that a behemoth like Bank of America has to adhere to,” said Lisa Lambrecht, President & CEO of Entrust Financial Credit Union in Henrico County. “I wish the federal government would understand that these one-size-fits-all regulations don’t work for credit unions. You have to remember; credit unions were formed to fill that gap that the larger established financial system was not serving.”
“In the rural areas, the larger institutions across the whole country have reduced their branches. The smaller banks have held their own, but we’re operating with 2000 less community banks a day than we were 12, 15 years ago. That’s over one fourth of community banks are gone — and I think a primary reason for that is regulatory fatigue,” said Lyn Hayth, President & CEO of the Bank of Botetourt.
“Every dollar we spend on increased compliance really doesn’t go to our capital. And if we could put that extra dollar into our capital, we could lend it back out into the community on a tenfold basis. So, our hope is that regulation can be decreased, and that we are able to take that capital that we save and invest it back into our communities,” said Alice Frazier, President & CEO of Bank of Charles Town in Middleburg.
“I think that community banks are the backbone of our country, and many of our rural markets. And not just our rural markets – but I think we serve a vital role to the growth of the economy,” said Mark Hanna, President of Farmers & Merchants Bank in Timberville.
The Economic Growth, Regulatory Relief and Consumer Protection Act (S.2155) ensures that small lenders can provide mortgage and other credit to hardworking Americans, helping them and their families grow and start businesses. The bill also institutes several important consumer protections:
- Allows consumers to get one free year of fraud alerts, which will help consumers who have been impacted by situations like the Wells Fargo scandal or whose identities or personal information has been stolen.
- Unlimited free credit freezes and unfreezes, which helps consumers impacted by data breaches like the Equifax hack that compromised the personal information of approximately 145 million Americans.
- Provides free credit monitoring for all active-duty servicemembers.
- Protects the credit ratings of veterans wrongly penalized by medical bill payment delays by the Department of Veterans Affairs (VA). This measure would prohibit medical debt from services received through the Choice Program and other VA community care programs from being reported to credit reporting agencies for one year. In addition, it would establish a dispute process for veterans seeking to remove adverse actions already on their report.
- Prevents mortgage companies from immediately kicking tenants out of their rentals if the landlord is foreclosed upon.
- Encourages banks to report suspicious behavior if seniors could be getting financially scammed.
- Allows seriously delinquent private student loan borrowers a one-time offer to remove negative reporting from their credit reports after making a series of on-time payments.
The legislation was introduced in November after years of bipartisan negotiations among Sen. Warner, Senate Banking Committee Chairman Mike Crapo (R-ID) and Banking Committee members Senators Joe Donnelly (D-IN), Heidi Heitkamp (D-ND) and Jon Tester (D-MT). It is also co-sponsored by Sen. Tim Kaine (D-VA).
WASHINGTON — Today U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking Committee, questioned Federal Reserve Board Chairman Jay Powell about the impact of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act. This bipartisan bill would reduce regulatory burdens on community banks and credit unions and provide new protections to consumers. It is expected to come up for a vote in the Senate as soon as next week.
During Senator Warner’s questioning, Chairman Powell dispelled spurious claims that the bill would weaken the Fed’s oversight of regional banks with assets between $100 billion - $250 billion. This had previously been a core argument advanced by special interest opponents of the bipartisan bill. Following the hearing, Senator Warner released the following statement:
“Chairman Powell’s testimony confirms what I’ve been saying all along: our bipartisan bill provides relief for main street consumers and small community banks and credit unions, while maintaining Dodd-Frank’s strong oversight of Wall Street and larger financial institutions,” Senator Warner said. “As the Chairman testified today, under our bill, the Federal Reserve will continue to administer strong and frequent periodic stress testing of regional banks with assets between $100 and $250 billion and will implement a framework that applies tailored, enhanced prudential standards to those same banks. Anyone who says otherwise does not have their facts straight.”
A transcript of Senator Warner’s questioning of Fed Chairman Powell follows:
Senator Warner: I want to ask you two very important questions. Let me preface this by saying that, in my first year here, one of the most important pieces of legislation I have ever worked on was the Dodd-Frank legislation. I think Dodd-Frank, for all its challenges, has made our system remarkably stronger. But we are eight years later, and there is a broad bipartisan group of us, and we are going to debate next week legislation that would make some modifications. In this legislation, S. 2155, we have not changed the requirements of that the Fed perform annual tests on banks above $250 billion in assets. I think that’s terribly important to maintain. We do give, after an appropriate period of time, the Fed the ability to do a rulemaking, the ability to look at those banks between $100 and $250 billion in assets to continue to undergo stress tests on a periodic basis. In my view is that stress testing is the most important prudential standard, and that frequent stress tests are some of the best tools we have to prevent another financial crisis.
Can you give us your views on stress testing including how rigorous they should remain and how frequently should remain on banks between $100 and $250 billion dollars in assets?
Chairman Powell: We do believe that supervisory stress testing is the most successful regulatory innovation of the post-crisis era. We are strong believers in this tool, including for institutions of $100 - $250 billion. It would be our intent, if this bill is enacted, that these institutions would continue to have meaningful, strong, regular periodic stress tests – frequent stress tests. We see it as a very important tool for these institutions.
Senator Warner: I hope folks listening to this understand we are not touching anything on the largest institutions above $250 billion, on annual stress tests. And as the Chairman of the Fed has indicated, even amongst those banks between $100 and $250 billion, we are still going to have frequent periodic stress tests that are still going to be strong. And the legislation lays out, into some detail, some of the requirements that we would have in those stress tests.
My last question is this: In terms of overall enhanced prudential standards, we do move in this legislation from $50 billion to $100 billion. We give you in the group of institutions between $100 and $250 billion about an 18-month period to tailor those potentially standards more appropriately. As you indicated, we are ready have an institution below $250 billion that qualifies as a Systemically Important Financial Institution (SIFI). I would like to clarify for the record for folks who will watch the debate next week, that you will take this responsibility of this 18-month rulemaking and do a thorough examination of the banks that fall into that category. And those who are claiming that somehow all enhanced prudential regulations of banks that fall into that category are going to suddenly magically disappear — that sure as heck is not the intent of this individual, and I hope it is not the intent of the Fed.
Chairman Powell: What I see us doing is creating a framework. We’ll be looking at all of the institutions are in that area and all of the risks that might arise in banks between $100 billion and $250 billion. And we will create a framework for assessing where systemic risk might be, where there might be regional risks. We will look at everything, and that framework will then be in place in 18 months. If there are institutions that are currently in that population or, over time, become systemically risky or even risky to themselves – the way the legislation is written it gives us a lot of flexibility to do that – and we will have that in place. We have not been shy about finding systemic risk [in banks with total assets] under $250 billion. We will feel comfortable doing this job I believe.
Senator Warner: I look forward to the debate next week. A lot of members have different views, but I think it is very important when people go about talking about you doing away with stress tests or eliminating any kind of enhanced prudential regulations, that is not our intent. There may be some tailoring that goes on in this new category, but particularly for the larger institutions, the status quo is going to remain.
Thank you, Mr. Chairman.
Nov 17 2017
WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking Committee, today joined Republicans and Democrats, including Senate Banking Committee Chairman Mike Crapo (R-ID) and Sen. Tim Kaine (D-VA), to introduce the Economic Growth, Regulatory Relief and Consumer Protection Act, bipartisan legislation to reduce regulatory burdens on community banks and credit unions and provide new protections to consumers.
The legislation is the result of bipartisan negotiations among Warner, Crapo, and Banking Committee members Sens. Joe Donnelly (D-IN), Heidi Heitkamp (D-ND) and Jon Tester (D-MT).
“This bipartisan bill is the result of years of tough negotiations among Democrats and Republicans,” said Sen. Warner. “The goal is simple: to help Main Street by rolling back unnecessary and burdensome regulations on credit unions and small community banks while ensuring that larger banks remain subject to the rules I helped put in place after the financial crisis to prevent another meltdown on Wall Street. This proposal makes targeted, commonsense fixes that will provide tangible relief to the community banks that are lifelines for smaller and rural communities. It also strengthens protections for veterans, the elderly and other consumers, and encourages community-based lending to boost economic growth and create jobs.”
“A strong and vibrant economy is important for American consumers, businesses, and the stability of the financial sector,” said Chairman Crapo. “The bipartisan proposals on which we have agreed will significantly improve our financial regulatory framework and foster economic growth by right-sizing regulation, particularly for smaller financial institutions and community banks.”
Following the 2008 financial meltdown, Sen. Warner helped write and pass into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, and he continues to support the important reforms included in the law. The legislation introduced today is carefully written to provide needed regulatory relief to main street—community banks and credit unions—which were inadvertently burdened by rules and regulations intended to hold Wall Street accountable. This bill will promote economic growth by making commonsense reforms to increase consumer lending, while protecting consumers.
Among provisions in the regulatory relief package are several proposals to protect and deliver relief to Virginia consumers:
- Community Banks and Credit Unions: This package includes a number of provisions related to community banks and credit unions that would increase their ability to extend credit to Virginia small businesses and families, while maintaining important consumer protections.
- Free Annual Credit Freeze for Consumers: This provision would require credit bureaus to include one free credit freeze and a free credit unfreeze per year, which would help protect consumers after the massive Equifax data breach that may have compromised the personal information of approximately 145 million Americans.
- Protecting Veterans Credit: This provision would protect the credit ratings of veterans wrongly penalized by medical bill payment delays by the Department of Veterans Affairs (VA). This measure would prohibit medical debt from services received through the Choice Program and other VA community care programs from being reported to credit reporting agencies for one year. In addition it would establish a dispute process for veterans seeking to remove adverse actions already on their reports.
“I thank Virginia's Congressional Delegation for their support of this legislation. Virginia's more than 725,000 veterans have served and sacrificed for our Nation and our Commonwealth. This service can sometimes lead to wounds and injuries that require ongoing care - which is not always fully covered by their veterans benefits. When they must incur out of pocket expenses for themselves and their families’ medical care, we must ensure that this does not also come with a bad credit score that could affect them for years to come. This bill will help our veterans in addressing credit issues or preventing a small credit problem from escalating,” said Virginia Secretary of Veterans and Defense Affairs Carlos Hopkins.
Virginia Bankers Association (VBA) President and CEO Bruce Whitehurst stated, “This package represents an important first step toward better tailoring of regulation to allow banks to serve their customers and communities more effectively and efficiently, much to their benefit. This bipartisan compromise also underscores the fact that the Dodd-Frank Act of 2010 took the regulatory pendulum too far and created unintended consequences for borrowers. It is great to see movement toward a more balanced approach to financial regulation and we appreciate the leadership of Senators Warner and Kaine.”
“This is a major step forward. Our community bankers are eager to do more to build their local economies, but over-regulation holds them back. The best provisions in this bill make getting a mortgage less complicated and more possible, and other good provisions simplify rules and reports, freeing bankers to do more good work with their customers and their communities,” said Virginia Association of Community Banks (VACB) President Steve Yeakel. “In particular, we want to acknowledge the leadership of both Senator Warner, who helped to forge the compromise, and Senator Kaine, whose early support gives the bill a strong foundation and a real chance at success on the Senate floor.”
“ICBA strongly supports the bipartisan regulatory relief package announced today and thanks Senate Banking Committee Chairman Mike Crapo and Sens. Joe Donnelly, Heidi Heitkamp, Jon Tester and Mark Warner for driving this agreement,” Independent Community Bankers of America (ICBA) President and CEO Camden R. Fine said. “Community bank regulatory relief is needed to improve lending and strengthen economic growth at the local level. We are pleased to see many provisions of ICBA’s Plan for Prosperity included in the agreement and thank all senators from both sides of the aisle who have contributed to this important initiative.”
“NAFCU thanks Chairman Crapo and his Democratic partners in the Senate for including provisions in this package that would lead to regulatory relief for credit unions,” said National Association of Federally-Insured Credit Unions (NAFCU) President and CEO Dan Berger. “We look forward to working with members of the Senate Banking Committee, their staff and other senators as this package moves through the legislative process. This bill is a step in the right direction, and we will continue to push for more relief for the industry and its 110 million member-owners.”
“This bill includes credit union-specific provisions that provide meaningful regulatory relief, a sign that policymakers are paying close attention to the needs of credit union members,” Credit Union National Association (CUNA) President/CEO Jim Nussle said. “We thank Sen. Crapo and his colleagues for working across party lines to advance regulatory relief legislation, and we look forward to continuing to work closely with them as the bill moves through the legislative process.”
In addition to Sens. Warner and Kaine, the bill was introduced by Democratic Sens. Joe Donnelly (D-IN), Heidi Heitkamp (D-ND), Jon Tester (D-MT), Joe Manchin (D-WV), Claire McCaskill (D-MO), Gary Peters (D-MI) and Michael Bennet (D-CO). Republican sponsors of the bill are Sens. Mike Crapo (R-ID), Bob Corker (R-TN), Tim Scott (R-SC), Tom Cotton (R-AR), Mike Rounds (R-SD), David Perdue (R-GA), Thom Tillis (R-NC), John Kennedy (R-LA), Jerry Moran (R-KS) and Jim Risch (R-ID). The bipartisan bill was also sponsored by Sen. Angus King (I-ME).