Kansas Common Sense: A Balanced Approach to Bank Examinations

Statement

On Tuesday, I introduced legislation to help unfreeze credit in rural America by reforming the bank examination process. Commonsense tells us that in the aftermath of a severe financial crisis, it is natural for regulators to respond with tight regulation. But Rather than provide clear rules of the road for an institution to make prudent loans to credit-worthy borrowers, banking agencies have made the lending climate worse by allowing the regulatory pendulum to swing too far. Four years later we are finding that the economic climate has still not improved and healthy Kansas banks and credit unions -- who played no role in the financial meltdown -- are paying the price.

The American economy will not benefit from a sustained recovery until certainty and confidence is restored to our financial system. My bill, Introduced with Senator Joe Manchin (D-W. Va), would provide clarity to the examination process so banks know the rules of the road and can make prudent loans to credit-worthy small businesses. S. 2160 would also create a robust appeals process for banks and credit unions to appeal a supervisory decision which they might feel was reached in error or without all the facts. With a similarly bipartisan bill pending in the House of Representatives, I hope we can get this bill to the President shortly and bring relief to Kansas institutions

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