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ABA Blueprint for Growth

in 2019 and Beyond

We call on Congress and the Administration to:

Drive Economic Growth

Banks are the key drivers of economic prosperity for consumers and communities everywhere, best served by well-functioning financial markets that promote broad and fair access to financial services for all Americans. Regulatory policy should seek a balance that frees bank resources to advance positive customer outcomes while promoting a stable market environment.

Capital and liquidity. Free up bank resources to drive growth by reducing overly burdensome and unnecessarily complex capital, accounting and liquidity requirements, adjusted for risk. Promote a regulatory stress test process that invites more public input to achieve more relevant, fair and consistent measures of bank strength. Fully explore the costs and benefits associated with CECL rule changes for potential negative impacts on economic growth.

Enhance customer relationships. Remove the focus on cookie-cutter rules that reduce bank flexibility to serve diverse needs. Reform ability-to-repay/Qualified Mortgage rules to remove unintended barriers to meeting community housing needs, and reconsider HMDA data collection and publication rules to eliminate negative impacts on credit access and ensure protection of consumer privacy.

Rationalize regulation. Tailor regulation to correspond to business model and risk, eliminate artificial regulatory asset thresholds and pursue a more balanced supervisory process that enhances bankers’ ability to employ financial resources to support economic growth.

Small business and community growth. Fuel consistent lending to job-creating businesses during varied economic cycles via appropriate balancing of government-supported Small Business Administration loan programs and private sector lending. Support targeted tax credits, such as the Low-Income Housing Tax Credit, New Markets Tax Credit and Opportunity Zone tax incentive, that underpin service to markets in need and promote economic inclusion.

Rural growth. Pursue pro-growth policies to help farmers manage debt burdens and pricing challenges, fight deposit flight through encouraging access to stable longer-term funding sources and address the shortage of qualified appraisers in rural areas that hinders real estate transactions.

Banks of all sizes. Promote the collective strength of our nation’s vibrant banking system, recognizing that banks of all sizes and business models play an instrumental role in driving local economic growth. Encourage the creation of de novo institutions, support the continued prosperity of community banking and otherwise promote the ability of all banks to better serve their customers and communities.

Embrace Policy Opportunities

Congress, the administration and bank regulators have wide-ranging opportunities to solve marketplace and regulatory issues that impede economic growth and restrict the banking industry’s ability to serve consumers and small businesses. Seize the opportunity to address these important concerns.

Cannabis banking. Resolve the conflict between federal law and state-authorized cannabis sales to permit the banking of these and related businesses where state-permitted. Seek practical solutions that mitigate state revenue collection, public safety and bank regulatory problems, while eliminating sanction risk for those banks that choose to provide such services.

Modernize CRA. Reform Community Reinvestment Act rules to embrace the dynamic marketplace and technology changes that have occurred in the 40 years since the law’s passage. Broaden recognition of activities that serve community interests, revise the “primary purpose” test, clarify regulatory expectations regarding the sufficiency of a bank’s CRA activities and improve consistency from exam to exam. Impose similar responsibilities on credit unions, the Farm Credit System and fintech companies, as such entities currently aim to serve mainstream financial customers.

Anti-money laundering/BSA. Limit the burdens of Bank Secrecy Act compliance and reporting—especially new requirements that place undue burdens on banks and bank customers—and eliminate potential sanctions for banking legal businesses. Support cooperative information-sharing efforts between banks and law enforcement that promote efficiencies and the establishment of appropriate reporting thresholds.

Rationalize Consumer Financial Protection Bureau Rules. Protect consumers while modifying rules that unnecessarily drive up complexity and costs of financial products. Roll back HMDA-like reporting requirements for small business loans, promote banks’ ability to serve customers with small-dollar credit and innovative products and revisit other rules that impede consumer and small business access to credit and other services. Advocate for improved CFPB governance and accountability.

Housing finance reform. Ensuring Americans have access to mortgage loans and affordable housing can help stabilize communities and provide individuals and families with the means of building wealth. Reduce barriers that impede the mortgage credit markets and address unresolved national housing finance policy issues. Constrain the role of the federal government—and potential taxpayer liability—in housing finance to a well-defined, explicit and fully priced guarantee of loans made by private lenders. Ensure equitable access to such programs by lenders of all sizes and from all communities.

Student debt. Support solutions that help address the massive burden of student debt and its drag on the economic opportunities of young people and others. In doing so, recognize the dominant impact of the federal government in this marketplace segment, as it holds 94 percent of all student loan debt.

Flood insurance. Help homeowners protect themselves by providing more incentives to participate in the National Flood Insurance Program and encouraging development of a strong private flood insurance market.

Fuel Innovation while Protecting Consumers

New banking technologies have the potential to increase U.S. competitiveness, promote financial inclusion, and expand access to banking services that drive the economy. Policymakers should facilitate innovation through smart regulation, preserve the integrity of the payments system and protect banks and consumers against bad actors.

Drive bank innovation. Promote a regulatory environment that fosters cutting-edge bank innovation to serve evolving consumer needs. Streamline supervisory processes to support reasonable risk-taking, bank-tech company partnerships and bank-driven pilot programs. Reduce burdens associated with vendor management issues.

Nonbank fintech providers. Ensure consumers are protected through the application of consistent rules and oversight of all providers, guarding against marketplace excesses and potential systemic risks (both local and national) resulting from unregulated participation in deposit, lending and payments system activities. Protect consumers from misrepresentations of bank-like products that lack equivalent consumer protections.

Payments system integrity. Support payment system innovation that fosters a safe, dynamic and efficient system that serves consumers, facilitates growth and provides equal access to all banks. Given the foundational importance of the payments system to economic stability and market confidence, maintain an overarching focus on system integrity and security, ensuring that all payments system participants adhere to stringent and consistent regulation and oversight.

Data security as a shared responsibility. Ensure that all parties share a national, bank-like standard of accountability for protecting customer information and notifying the public after a breach, with the responsible party bearing the costs for their failed security.

Robust culture of cybersecurity. Expand collaborative public-private efforts to fight cyber threats through information-sharing and self-reporting of cyber risks without fear of regulatory sanctions or reputation risk.

Pursue a Level Playing Field

Marketplaces have changed, and a host of once-narrow industries have entered the mainstream. Government policies must be updated to reflect those changes, eliminating unnecessary subsidies while ensuring a level playing field for similarly situated institutions. Price controls should be eliminated.

Credit unions and the Farm Credit System. Eliminate market inequities among banks, credit unions and FCS institutions by applying equal regulation, tax treatment and regulatory oversight to these entities. Lax regulation and government subsidies permit larger CUs and the FCS—now mainstream financial services providers—to drain deposits from local communities and lower underwriting standards, harming those communities and the community banks that serve them. Differences in the tax status, application of CRA, brokered deposit rules, appraisal standards, capital and regulatory laxity must be addressed.

Market pricing for card services. Restore market pricing on debit interchange fees to ensure free market principles are in play fostering competition and innovation.

Regulatory equivalence. Reduce economic distortions by providing more charter flexibility and capital options for thrift institutions, including mutual banks, while addressing Sub S corporation dividend, capital, tax and other issues.