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ABA: The American Bankers Association

ABA Blueprint for Growth

In 2020 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, tailoring regulation to business model and risk.

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, recognize the importance that larger institutions play in our banking ecosystem, and otherwise promote the ability of all banks to better serve their customers and communities.

Capital, funding, and reserves. Implement recent capital reforms, with their tailored focus on likely risks and reduction in complexity and redundancy; supervision exams should recognize the effect of capital and liquidity regulations. Draw upon full-cycle study of CECL—including its procyclicality—to identify reforms to redress negative impact on lending and economic growth.

Brokered Deposits/National Rate Cap Laws and Regulations. Section 29 of the Federal Deposit Insurance Act, the statutory grounds for the rules and regulations on brokered deposits, was enacted in 1989. Thirty years later the statute is out of date, the rules and policies ambiguous, outmoded, and in urgent need of modernization to ensure that banks are not inhibited from holding stable funding, engaging in modern business practices or serving the needs of their customers. Modernize the brokered deposit framework to allow diversity of funding sources, better interaction with depositors, and a more balanced recognition of assets rather than deposits as sources of risk.

Mortgage Markets. Rectify excessive mortgage regulations that have inflated costs and prevented banks from flexibly serving their customers. Reduce liabilities and eliminate an uneven playing field that drives the market to nonbanks and diminishes depository institutions’ role in mortgage finance. 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.

Small business and community growth. Recognize the significant increases in capital investments by customers, contributions to employee profit-sharing programs, charitable investments, and increased bank capital levels resulting from recent tax reform efforts; make current personal tax rates permanent. 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. Support Export-Import Bank activities. Fuel consistent lending to job-creating businesses via appropriate balancing of government-supported Small Business Administration loan programs and private sector lending.

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. Empower Ag Banks with the same tax supports available to help farm lending as is provided to the Farm Credit System.

Embrace Policy Opportunities

Congress, the Administration, and bank regulators have opportunities to solve marketplace and regulatory issues that impede economic growth and stifle 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 and state law to permit the banking of state-authorized cannabis companies and related businesses. Seek practical solutions that mitigate pressing 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, nonbank mortgage lenders and fintech companies, as such entities currently aim to serve mainstream financial customers.

Anti-money laundering/BSA. Promote efficiencies that both reduce burdens on banks and their customers while continuing to assist law enforcement. Embrace legislative and regulatory efforts to reform beneficial ownership reporting, CTR/SAR thresholds, and seasoned customer exceptions, and expand law enforcement feedback to banks.

Rationalize Consumer Financial Protection Bureau Rules. Protect consumers while modifying rules that unnecessarily drive up complexity and costs of, and access to, financial products. Limit HMDA-like reporting requirements for small business loans, and promote banks’ ability to serve customers with small-dollar credit and innovative products. Seek improved CFPB governance and accountability. Ensure consumers are protected by applying consistent rules, oversight and enforcement to all providers of financial services, in particular nonbanks that have sought to aggressively enter the deposit-taking, lending, and payments marketplace.

Fair lending. Support the industry’s efforts to extend credit to all qualified borrowers and promote economic inclusion. Confirm in regulation and updated interagency guidance that consideration of disparate impact claims will be governed by standards consistent with the Supreme Court’s framework announced in Inclusive Communities.

Housing finance reform. Ensure Americans have access to mortgage loans and affordable housing. 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 banks of all sizes and from all communities.

Environmental, Social, and Governance (ESG). Inform policymakers and the public of robust industry efforts to further responsible and risk-based environmental, social and governance efforts. Provide a forum for industry discussion and information sharing on ESG issues. Respond to ill-advised efforts to restrict legal lending, investment, or other engagement in ESG-related activities; promote and support voluntary efforts that foster ESG activities in the private sector.

Flood insurance. Help homeowners to protect themselves with expanded flood insurance options, either through participation in the National Flood Insurance Program or through private flood insurance. Advance reforms to strengthen the NFIP financially and to retain its affordability, while also promoting a more vibrant private flood insurance market. Direct the regulatory agencies to issue clear and updated guidance to help lenders comply with mandatory purchase requirements.

Embrace Diversity and Economic Inclusion. Promote industry efforts in bank employee diversity and financial inclusion. Remove regulatory burdens on Minority Depository Institutions and other small and community banks that focus their services on underserved communities. Continue efforts to bring unbanked and underbanked consumers into the mainstream banking system with products targeted to meet their needs.

Promote Innovation and Consistent Regulation

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 that serves evolving consumer needs. Streamline supervisory processes to support reasonable risk-taking, bank-tech company partnerships, bank-driven pilot programs, and the appropriate use of artificial intelligence and machine learning. Reduce burdens associated with vendor management issues, while strongly encouraging Core Service Provider innovation, oversight, and consumer-focused value to bank clients.

Avoid artificial marketplace distortions. Recognize that inconsistent regulatory rules drive markets to the least-regulated entity, creating potential consumer harm and possible systemic risk. Ensure that all financial services providers are subject to the same rules, oversight, and enforcement. Be wary of “Big Tech” efforts to enter the financial services arena given privacy and other concerns.

Payments system innovation and integrity. Support payment system innovation that fosters a safe, dynamic, efficient, and bank-centric system that serves consumers and facilitates growth. Ensure equal access/pricing for all banks, while maintaining an overarching focus on system integrity and security.

Data Privacy. Advocate for federal privacy legislation that: protects consumer privacy while incorporating existing federal laws such as the GLBA; does not obstruct the ability to combat fraud or comply with existing laws and regulations; and, does not otherwise impede the ability to conduct authorized financial transactions. Advocate for federal data breach legislation that ensures that all businesses 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. Promote a robust culture of cybersecurity at all businesses in the face of increasing threats. Ensure consumers have the ability to securely and transparently share their financial data with third parties.

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 (a point most demonstrated by the recent wave of large credit unions expanding operations through the acquisitions of banks)—to drain deposits from local communities, reduce local tax revenue 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 to foster competition and innovation.

Download the Blueprint

Approved by the ABA Board of Directors February 4, 2020.