Economic Growth, Regulatory Relief, and Consumer Protection Act--Motion to Proceed

Floor Speech

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Mr. ROUNDS. Mr. President, today I rise in support of the Economic Growth, Regulatory Relief, and Consumer Protection Act which is being considered on the Senate floor for this week. As a member of the Senate Banking Committee, I am pleased to be an original cosponsor of this important legislation which will provide much needed regulatory relief to our community banks and credit unions whose ability to serve their customers has been made more difficult since the passage of the Dodd- Frank Act.

Enacted in 2010, Dodd-Frank was an overreaction to the 2008 financial crisis. Rather than actually addressing the underlying issues that caused the financial crisis, Dodd-Frank created a massive new bureaucracy and saddled our financial institutions with burdensome and onerous new regulations. It is 2,300 pages in length and created more than 400 new rulemakings, which led to 27,000 new Federal mandates on American businesses. This limits the ability of our financial institutions to grow and serve their customers, especially for smaller banks in rural areas such as in my home State of South Dakota.

Just last summer, the U.S. Department of Treasury reported that the regulatory burdens of Dodd-Frank have reduced economic growth and ``undermined the ability of banks to deliver attractively priced credit in sufficient quantity to meet the needs of the economy.''

Without question, no one wants to repeat the events that contributed to the economic recession that began in 2008. We are only now beginning to lift out of that nearly decade-long economic slump, thanks to the tax relief law and President Trump's focus on regulatory reform.

Just in the last year, we have enacted historic tax reform, we have undone burdensome and unnecessary regulations at a record pace, and we are restoring the American people's confidence at levels not seen in decades, but we must do more, which is why our bipartisan legislation is so important.

Making sure American families and businesses have access to credit when they need it is critical as we work to grow our economy and create jobs. The Economic Growth, Regulatory Relief, and Consumer Protection Act will strengthen America's financial system and expand economic opportunities across the entire country, especially in rural areas which are often the most underserved.

Of the many fatal flaws of Dodd-Frank, perhaps most damaging was its one-size-fits-all approach. By taking a one-size-fits-all approach, Dodd-Frank imposed disproportionate compliance costs on our smaller community banks and credit unions, especially given the improbability that these smaller institutions pose a significant risk to our financial system. This type of approach is particularly harmful to our smaller financial institutions which are so vital to our communities.

With more than 6,500 community banks throughout the country supporting even the remotest areas, we must make certain we are helping and not hindering their ability to serve their communities.

Almost half of small businesses, which we all know are the drivers of job creation and economic growth in America, are supported by small community banks. Providing these institutions with regulatory relief is critical, which is what our legislation does.

Let me go through some of the highlights, which include seven provisions or bills I introduced. It includes the Home Mortgage Disclosure Adjustment Act, which I introduced with Senator Heitkamp earlier this year, and will provide small banks and credit unions with data reporting relief.

We also provide relief from Dodd-Frank capital rules that allow banks to count high-quality municipal bonds toward capital requirements, providing help to both banks and local units of government that issue that debt. In other words, those banks can now make a market for those municipal bonds once again.

Our legislation also streamlines Federal rules to help small, local Federal savings associations, known as FSA's or thrifts, expand their ability to offer loans to more families and businesses without going through a costly charter conversion process.

It also includes parts of the Community Bank Access to Capital Act, which would free small banks from having to complete arduous and expensive tests which are already mandated by Dodd-Frank, and it makes it easier for banks with less than $3 billion in assets to raise capital and grow.

I am also pleased it includes my provision to protect the credit of our Nation's veterans, so veterans waiting on delayed payments from the VA Choice Program cannot lose their credit ratings because of it. It is a sad commentary when you have to make a law in the financial institutions section of the code to take care of veterans because the VA cannot pay their bills on time.

It also protects seniors by removing liability for financial services institutions and professionals reporting suspected fraud of senior citizens to the authorities. We also provide relief to small public housing agencies by reducing regulatory burdens on and increasing flexibility for these entities.

This bill also provides rural appraisal relief for cases when buyers have trouble finding a qualified appraiser. The reason for this is because if you want to get a home loan, one of the requirements under Dodd-Frank is that you have to have a qualified appraiser actually appraise the home, regardless of where you live. What this provision does is it relaxes some of those rules with regard to where the amounts on a mortgage can be, less than a particular amount as specified in our bill, and still be a qualified mortgage so banks can move them on to the secondary market. That helps to create a market for those mortgages, making it easier for a consumer to actually access that credit.

Our bill also gives the Federal Reserve flexibility in designating banks as systemically important, exempting banks with less than $100 billion in assets from several Dodd-Frank provisions that apply to systemically important financial institutions, or SIFIs, including reporting requirements, limits on lending, and limits on mergers and acquisitions.

Also banks with assets between $100 billion and $250 billion would receive relief from tighter oversight applied by Dodd-Frank. This would exempt 15 regional and midsized banks from these more stringent rules. Meanwhile, more than a dozen of our country's largest banks will still have to comply with the SIFI requirements. These are the largest financial institutions.

We also eliminate barriers to jobs by allowing mortgage loan originators to work temporarily in a new State or for a new financial institution while their applications for new licenses are pending. Our bill also requires the Treasury to study and report on the risks of cyber threats to our financial institutions and capital markets.

Finally, our bill provides regulatory relief from enhanced supplementary leverage ratio for certain banks that service organizations like mutual funds and State and local pension plans. It doesn't hardly seem appropriate that we would make our banks less competitive than foreign banks for providing that same service. Let's keep that opportunity and that market within our own borders as well. Let's allow them to be competitive, which saves on costs for mutual fund purchasers.

This benefits countless local governments across the country that do business with these banks. In my home State alone, this includes the State of South Dakota, the South Dakota Retirement System, the Rapid City Regional Hospital, the city of Vermillion, and the Watertown School District, just to name a few of them. While this provision will not help all banks, it will affect some banks, which benefits consumers, and in the future perhaps we can give the same relief to all banks that offer these important services.

These provisions, along with the many others of our bill, will strengthen our financial system in the United States and reduce the unnecessary burdens on small or midsized banks so they can focus on serving their communities, not complying with layers of bureaucracy.

Making sure families and businesses have access to credit when they need it is critical as we work to grow a healthy American economy. Every step we can take to provide relief to our lenders is a win for families and businesses that rely on them to run their businesses, to buy a home, or to save for college.

Small community banks don't think of banking in terms of derivatives and default swaps like they do on Wall Street. They think of banking in terms of how they can best serve their communities, their friends, neighbors, store owners, and job providers. Our bipartisan Economic Growth, Regulatory Relief, and Consumer Protection Act will help these lenders focus on doing just exactly that.

I thank Chairman Crapo and the other 24 cosponsors of this legislation for their commitment to working together to provide much needed relief that will enhance our ability to grow our economy.

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