Economic Growth, Regulatory Relief, and Consumer Protection Act--Motion to Proceed
Floor Speech
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Mr. WICKER. Mr. President, I filed an amendment yesterday that, I hope, will be included in this banking bill that the Senate is considering today and tomorrow.
My amendment was inspired by a bill I introduced last July, which is a simple bill, bipartisan, and should be noncontroversial. Here is what the amendment would do: It would exempt trust-preferred securities from a bank's capital requirements.
Now, you ask: What is a trust-preferred security?
It is an investment vehicle that looks a little bit like equity and, at the same time, looks a little bit like debt.
How did these come about?
Actually, the FDIC asked many banks to invest in such securities in previous decades. A company creates trust-preferred securities by creating a trust, issuing debt to it, and then having it issue preferred stock to investors--trust, debt, and preferred stock to investors. The FDIC used to like trust-preferred securities. It considered them sound investments before 2010. May I repeat: The FDIC asked many banks to invest in these securities. However, through its interpretation of the Basel III regulations, the FDIC is now counting these securities against the banks' capital holdings.
Who is affected by this?
It happens to be 20 small banks in the heartland of America.
My amendment would exempt these banks from having to consider trust- preferred securities as part of their capital requirements; therefore, it would promote growth in rural communities around the country as well as provide regulatory relief for our small banks.
That is really what this bill is about. The Dodd-Frank legislation took a broad-brush approach and punished many medium and small banks when they had nothing to do with the financial crisis of 2007 and 2008. Dodd-Frank has done harm to Main Street. My amendment would alleviate some of that harm. If we want to help banks grow the economy, we need to be mindful of the ways in which Dodd-Frank's excessive regulations are hurting small banks. This goes right in hand with the major thrust of this overwhelmingly bipartisan bill on which we are about to proceed today or tomorrow.
These 20 small banks nationwide inject needed capital and access to credit in our communities--capital and credit to launch new local businesses or create jobs. When these small banks struggle, communities struggle. For one to comply with the one-size-fits-all Dodd-Frank regulations demands resources that some of our community banks do not have. Here I am arguing for my amendment and for the entire bill. Unlike big banks, these small banks in rural communities might be forced to close because of the demands that are too high or they might have to pass along extra costs to consumers. Neither option helps our local communities and the people who live there.
These 20 small rural banks were not in the least bit responsible for the financial crisis. So my amendment, based on a bipartisan bill, recognizes, along with the base bill, the fact that the small banks are not part of the problem and never were part of the problem. It would alleviate the burdens that these banks have shouldered since Dodd-Frank has become law.
I commend the chairman of the Banking Committee and the overwhelming bipartisan majority on the Banking Committee for working on this legislation. This is a red-letter achievement in a body that has become overly partisan, regrettably so, in the last few years, but we can work together to offer relief to our small credit unions and small community banks. In doing so, we need to take the added step of relieving these 20 smalltown banks from an onerous requirement.
I urge the chairman and the ranking member and Members of the Democratic and Republican leadership to consider making this part of an overall managers' amendment or accepting this amendment and moving forward because it has everything to do with following the thrust of this entire bill.
I thank the Presiding Officer.
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