Independent Banker - August 2017 - 29

any applicant for business credit
and maintain a record of responses
separate from their applications.
Additionally, these records are to be
kept separate from the underwriting
process, compelling banks to create a
distinct bureaucracy apart from their
lending operations.
Institutions that cannot afford to
deploy these fi rewall structures are
required to accommodate additional
notice requirements, a requirement
that disproportionately affects
community banks and penalizes
them for their smaller size and risk
profi le. Further, data collected by
community banks and subsequently
If enacted as written,
this paperwork burden
will harm community
banks, waste critical
resources and further
restrict lending.
made public by government agencies
could compromise the privacy of
applicants-damaging the relationship-based
community bank model.
Forceful response
At a time of ever-rising regulatory
mandates and sluggish economic
growth, imposing the small-business
equivalent of the Home Mortgage
Disclosure Act is the last thing
community banks and their customers
need. If enacted as written,
this paperwork burden will harm
community banks, waste critical
resources and further restrict lending,
while offering little benefi t to
consumers, regulators and the fi nancial
system.
ICBA has been waiting expectantly
for the CFPB to begin the rulemaking
process, though not idly. While
ICBA has for years encouraged the
bureau to delay the implementing
rules amid the cacophony of new
regulations that followed the 2008
fi nancial crisis, an outright repeal has
been a key provision in several iterations
of our Plan for Prosperity and
has been repeatedly introduced in
multiple Congresses by Rep. Robert
Pittenger (R-N.C.).
So when the CFPB earlier this year
launched an inquiry on small-business
reporting in its fi rst step toward
a rulemaking, ICBA responded forcefully.
ICBA and a group of member
community bankers met with CFPB
representatives so they could hear
directly from the industry. In a public
statement, ICBA urged the CFPB
to exempt community banks and
continued its call for Congress to
repeal the Section 1071 mandates in
their entirety. " The CFPB's data collection
and reporting mandates will
compound existing regulatory and
paperwork burdens to the detriment
of economic and job growth, " ICBA
president and CEO Cam Fine said.
In support of ICBA's efforts, a
bipartisan group of 72 members
of Congress in June called on the
CFPB to use its authority to exempt
community banks from any forthcoming
rule. The joint letter to CFPB
director Richard Cordray said the
requirements threaten to undermine
community bank lending and
decrease access to credit-harming
the small-business owners the rules
are intended to help.
Repeal effort
Meanwhile, ICBA continues to
work with Congress on behalf of an
outright repeal, which is included in
House Financial Services Committee
chairman Jeb Hensarling's (R-Texas)
Financial CHOICE Act, Rep. Blaine
Luetkemeyer's (R-Mo.) CLEAR
Relief Act and Pittenger's soon-to-bereintroduced
Right to Lend Act. The
72
bipartisan members of
Congress called on the
CFPB to exempt community
banks from any
forthcoming rule
Treasury Department has also lent
its support to a repeal, saying in its
June report on banking regulations
that the new standards would be
costly to implement and decrease
credit availability.
This data-collection rulemaking
poses the threat of signifi cant new
burdens on community banks at a
time of rising overregulation. It is up
to ICBA and the community banking
industry to continue the campaign
for tiered and sensible oversight by
checking this new mandate before it
is written into yet another resourceconsuming
regulation.
Aaron Stetter (aaron.stetter@icba.
org) is ICBA executive vice president
of policy and political operations.
Lilly Thomas (lilly.thomas@icba.org)
is ICBA senior vice president of senior
regulatory counsel.
____________
__
_____________
How can you help?
While ICBA continues working
with Congress to advance a
repeal, lawmakers need to hear
directly from the industry on this
important policy. Community
bankers can do their part by
using ICBA's Be Heard grassroots
website to call on their
lawmakers to support the CLEAR
Relief Act: icba.org/beheard
independentbanker.org
ICBA IndependentBanker 29
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Independent Banker - August 2017

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