FOR IMMEDIATE RELEASE
June 16, 2011
ABA Media Contact: John Hall
(202) 663-5473
E-mail: jhall@aba.com
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ABA TESTIFIES ON IMPACT OF INCREASING REGULATORY
BURDENS ON NATION’S COMMUNITY BANKS

WASHINGTON – The American Bankers Association testified today on what Congress can do to relieve new regulatory burdens that threaten community banks, severely limiting their ability to meet the credit needs of individuals and small businesses across the country.

Thomas P. Boyle, vice chairman of State Bank in Countryside, Illinois, testified on behalf of ABA before the House Subcommittee on Economic Growth, Tax and Capital Access.  State Bank is an $800 million bank serving the Chicago market with six offices and 105 employees. 

Boyle testified that community banking faces significant headwinds under the weight of new rules and regulations that dramatically increase costs while limiting access to capital that helps small businesses and individuals thrive.

“The consequences are real,” he said.  “Costs are rising, access to capital is limited and revenue sources have been severely cut.  It means fewer loans get made.  It means a weaker economy.  It means slower job growth.  With the regulatory over-reaction, piles of new laws and uncertainty about government’s role in the day-to-day business of banking, meeting local community needs is difficult at best.”

Boyle went on to predict a severe contraction of the banking industry without “quick and bold actions to relieve regulatory burden.”  His testimony focused on three key themes.

• New regulations increase the cost of doing business while limiting access to capital:  Each new regulation, or change in an existing one, adds another layer of complexity and cost of doing business.  The Dodd-Frank act will add an additional, enormous burden, has stimulated an environment of uncertainty, and has added new risks that will inevitably translate into few loans for small businesses.
• New rules substitute Washington bureaucratic judgment for that of local bankers:  Increasingly, the government has inserted itself in the day-to-day business of banking.  The government should not be micro-managing private industry.  Traditional banks tailor products to borrowers’ needs in local communities, and prescriptive rules inevitably translate into less access to credit and banking services.
• The consequences for consumers, small businesses and the economy are severe:  The Dodd-Frank act will raise costs, reduce income, and limit potential growth, all of which drives capital away from banking, restricts access to credit for individuals and business, reduces financial resources that create jobs, and retards growth in the economy.

“The regulatory burden from Dodd-Frank and the excessive regulatory second-guessing must be addressed in order to give all banks a second chance to maintain long-term viability and meet the needs of local communities everywhere,” Boyle said.

For a copy of Boyle’s full testimony, please click here.

The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two million employees. The majority of ABA’s members are banks with less than $165 million in assets. Learn more at aba.com.
 

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