Joint ABA and State Bankers Association Letter on Strength and Resiliency of the US Banking Sector

Dear Speaker McCarthy, Majority Leader Schumer, Minority Leaders McConnell and Jeffries, Chairmen Brown and McHenry, and Ranking Members Scott and Waters: 

On behalf of the American Bankers Association and the 51 state bankers associations, we write to underscore the strength and resiliency of the U.S. banking sector, powered by banks of all sizes, eager to serve every segment of the American economy.   

While the recent failures of Silicon Valley Bank and Signature Bank need to be examined carefully, both by the industry and policymakers, they do not reflect the health and vitality of the overall sector. The U.S. banking system remains the deepest and most resilient in the world, and the diversity of banks serving communities across the country continues to be a source of strength for our economy. The nation’s 4,700 banks, including community banks, midsize banks, regional banks, and large, globally active banks, compete every day for Americans’ business. While banks may have different business models and strengths, institutions succeed when they meet the needs of the communities they serve. 

No bank is defined by size alone, and clients and customers have a wide range of choices among different, sometimes overlapping specializations. Community banks are known for their focus on relationship, small business, and agricultural lending that have been the hallmark of small banks since this country’s founding. Midsize and regional banks play an outsized role in serving the needs of medium-size businesses and developing multifamily housing, while the largest banks have the size and scale necessary to run significant nationwide consumer lending businesses and meet the financial requirements of America’s multinational corporations. Banks of every size and business model add unique value and are critically important to our financial system and our economy.

As Congress, regulators, and independent parties examine the idiosyncratic nature of these bank failures and consider potential policy responses, we urge policymakers to preserve America’s competitive advantage by ensuring that banks of all sizes with diverse business models are allowed to compete and succeed in serving the needs of their communities. This can be done by tailoring regulatory rules and supervision to a bank’s risk profile. We encourage Congress to pursue policies that support the vibrant and competitive banking system that exists today and advance bipartisan legislation that would make it easier to open more de novo banks to meet the wide-ranging needs of customers and communities. Banks have always welcomed competition, as competition increases choice for American consumers and strengthens the communities they serve.

Americans know that there is no safer place for their hard-earned cash than in a bank, especially one they have come to trust over time. To reinforce that trust and confidence, we respectfully ask that you foster a business environment that allows all segments of the banking sector to compete and thrive. By doing so, you will be taking an important step in supporting the broader economy and expanding opportunity for all Americans.