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

Floor Speech

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Mr. CRAPO. Mr. President, I have been very encouraged by the reaction of my colleagues and their support for the Economic Growth, Regulatory Relief, and Consumer Protection Act over the last few days.

We have heard many stories about how the regulatory burden on our financial institutions has had a direct impact on Main Street. Yesterday, Senator Moran talked about the ranchers who couldn't get a loan because they lacked collateral in an emergency. Senators Heitkamp and Perdue explained the benefits of relationship banking and the advantage of lending based on a personal knowledge of the customer. Senator Corker talked about Dodd-Frank's unintended consequences for small financial institutions. Senator Tester discussed bank consolidation and the real impact it has had on communities in Montana. Senator Donnelly went through the various important consumer protection items included in this bill. Senator Kennedy also talked about some of the important consumer protection provisions and about the lack of access to credit for small businesses in Louisiana. Senator Warner spent a good amount of time defending this robust bipartisan bill against its critics and some of the false information being shared about the bill.

Today, we have heard even more Senators come to the floor with similar stories and expressions of similar sentiments about the need to help free up our small community banks and credit unions around this country from the overpowering burdens they are facing right now in the regulatory world.

Many of my colleagues who are not on the Banking Committee have asked if they could have the time and opportunity to speak about the bill, as well, and we will see them coming to the floor, as we have started to see today, to discuss these kinds of issues. Senators McConnell, Cornyn, Portman, Lankford, and others have been very supportive of these efforts to enact pro-growth, pro-jobs legislation.

We also heard from the bill's critics yesterday. But the resounding message from Congress was that our constituents have asked for regulatory relief and consumer protection and economic growth, and we stand ready to deliver it.

We and our neighbors have noticed that many of our community financial institutions have closed their doors over the last decade. In fact, we have seen almost no new community financial institutions chartered or new branches being opened over the last few years.

These financial institutions, of all sizes and forms, provide critical services in our communities. They help businesses manage operations, help entrepreneurs get funding to start their businesses, help families buy a home, help all of us save for our kids' educations, and help us deal with financial emergencies.

Community financial institutions are the pillars of towns and communities across America, particularly in rural States like my own, Idaho. They have certain advantages compared with their larger counterparts, operating with an understanding and history of their customers and, therefore, a willingness to be flexible.

Unfortunately, increased regulatory burdens and one-size-fits-all regulations have limited their ability to help customers. The operating landscape of these institutions has changed dramatically over the last few years, and community banks and credit unions across the country have struggled to keep up with the ever-increasing regulatory compliance and examiner demands coming out of Washington.

I regularly hear from small banks and credit unions in Idaho about how one-size-fits-all regulatory approaches are impacting their businesses and product offerings and hindering their ability to serve their communities.

For example, Koreen Dursteler from the Bank of Commerce in Idaho Falls, a small bank with just over $1 billion in assets, has written about the avalanche of regulation over the past 8 to 10 years. Due to excessive regulations related to qualified mortgage loans and the cost of hiring extra compliance staff to help keep up with additional regulation, her bank has had to stop offering consumer mortgages and real estate loans. That is a big deal. This is not an isolated incident. I hear stories like that all the time.

Another example: Val Brooks works at Simplot Employees Credit Union, which serves Canyon County, ID. She noted that Simplot has long been proud to serve this area, where some folks come from lower income households and may be underserved. Simplot worked to obtain the necessary education, compliance certification, and licensing standards to better serve its customers and the community. However, after the CFPB increased already burdensome mortgage regulations, such as the qualified mortgage and HMDA, Simplot credit union had to make the very difficult business decision to stop offering mortgage loans altogether. It was just too cost prohibitive and resource-draining.

When these small financial institutions are not able to offer certain products within the communities they serve, it is a direct hit to the citizens of Idaho and to all of our States.

To be absolutely clear, it is not that folks are against all regulation, but rather, to the people outside of Washington, it seems as if regulatory changes are made without much thought as to how they will truly affect customers and financial providers. As policymakers, we have a responsibility to diligently and frequently study the state of our economy, our regulatory framework, and how these things are impacting our communities and citizens, including people's access to financial services.

We must encourage regulations that not only ensure proper behavior and safety for our markets but also are tailored appropriately to the size and risk type that is being regulated. This means making sure the burden on financial institutions is not so large that consumers, businesses, and our communities are deprived of financial services and suffer as a result.

This has been an important issue to Members on both sides of the aisle. Congress has held numerous hearings in prior years exploring many of these issues, including a series of hearings in the Banking Committee in 2015. Then, in March of last year, the Banking Committee issued a request for legislative proposals that would promote economic growth. We held bipartisan hearings and briefings and meetings with stakeholders across the spectrum, vetting potential ideas for right- sizing the regulatory dynamics. We began the process by holding a hearing on the role of financial companies in fostering economic growth, which included former regulators, stakeholders, and the chief economist of the AFL-CIO.

At our next two hearings, we examined proposals that would tailor existing laws and regulations to ensure that they are proportionate and appropriate for small financial institutions and midsized regional banks. Then, in June, the financial regulators provided feedback on their Economic Growth and Regulatory Paperwork Reduction Act, or EGRPRA, report and the proposals discussed in previous hearings. As a result of this process, we introduced the Economic Growth, Regulatory Relief, and Consumer Protection Act, which is now S. 2155.

I repeat that often there are those who say we are dismantling the regulatory system. This legislation focuses on the smallest financial institutions in our country. The legislative system that was put into place was marketed as being aimed at Wall Street excesses, but I held a townhall meeting when we were debating this legislation on Main Street in Boise, ID, and said then that although the justification for some of these regulations was focused on Wall Street, the crosshairs were on Main Street. Unfortunately, that has turned out to be all too true. Large banks have profited tremendously in the last 6 to 10 years. Small banks and credit unions have suffered dramatically. We have lost many of our banks and credit unions across this country. As I indicated earlier, very few new ones have started up because they simply cannot meet the compliance burdens of being required to meet regulatory requirements that are designed, in the first instance, for huge banks.

What we need is a regulatory system that recognizes there is a difference between a community bank or a credit union in a small community and a megabank on Wall Street that is doing its business globally. We need to have our regulatory system tailored so the risk posed by a particular financial institution is taken into consideration in the regulations applied. That is what this legislation seeks to accomplish. Like I said at the outset, I am very glad we have had broad support for this.

I would like to take a minute and go over some of the specific provisions in the bill. The Economic Growth, Regulatory Relief, and Consumer Protection Act is aimed at rightsizing regulation for financial institutions, including community banks and credit unions, making it easier for consumers to get mortgages and to obtain credit.

As I have often said, the real victims of what I am talking about are not really the community banks and the credit unions but the people, the small businesses--those who need to have access to credit and need to have the ability to get a loan to purchase a house or to start a small business or to expand a small business or other important needs.

This bill also increases important consumer protections for veterans, for senior citizens, victims of fraud, and those who fall on tough financial times. The provisions in this bill will directly address some of the problems I frequently hear about from the financial institutions in Idaho. Community banks and credit unions are simple institutions focused on relationship lending and have a special relationship providing credit to traditionally underserved and rural communities where it may be harder to access banking products and services or to get a loan.

Dodd-Frank instituted numerous new mortgage rules and complex capital requirements on community banks and credit unions that have hindered consumers' access to mortgage credit and lending more broadly. On July 20, 2016, the American Action Forum attempted to estimate the number of paperwork hours and final costs associated with the Dodd-Frank rules. In total, the forum estimated that the bill had imposed more than $36 billion in final rule costs and 73 million paperwork hours as of July 2016.

To put those figures into perspective, the costs are nearly $112 per person, or $310 per household. Additionally, it would take 36,950 employees working full time to complete a single year of the law's paperwork based on agency calculations.

Our bill is focused on providing meaningful relief to community banks and credit unions, helping them to prudently lend to consumers, home buyers, and small businesses.

I have more I want to say. I want to take a brief break right now, and I will come back in a few minutes.

At this point, I yield back my time until I return.

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