Weekly Update: Letting Communities Compete
By Rob Wittman
March 16, 2018
Washington needs to change the way it does business, especially when it comes at the expense of our small businesses. Unnecessary regulations are continuing to strangle the American economy. Instead of protecting consumers, workers, and the environment, these regulations are increasing the power of government agencies and driving up the costs of compliance for Main Street. In fact, we have so many unchecked regulations, it is nearly impossible to keep track of them all and there is red tape everywhere that prevents companies from growing and hiring.
For years now, Dodd-Frank has stifled the growth of community banks and financial institutions with thousands of pages of complex Washington regulations. Community banks are closing their doors because of the sheer magnitude of compliance costs, and as a result, your average American or new small business may struggle to access a line of credit.
In Virginia, the regulatory burden for each credit union is more than $4,514, which subjects members to higher loan rates, longer wait time for loan approvals and decreased services. It is hurting our community banks as well by forcing them to merge. There have been 32 mergers in the last five years, including eight or nine in each of the last two years. These mergers mean fewer choices for the consumer and less competition in the marketplace to keep rates down.
Washington needs to get out of the way so community banks and credit unions can focus on meeting the needs of our communities. The House has been working hard the past few weeks to pass some important pieces of legislation that would roll back unduly burdensome regulations and increase transparency:
1. H.R. 4725, the Community Bank Reporting Relief Act that requires federal banking regulators to simplify reporting requirements for community banks.
2. H.R. 4607, the Comprehensive Regulator Review Act requires that regulators issuing these heavy-handed rules be required to review their regulations every 10 years. Such a review will determine which regulations are outdated and unnecessary and allow community banks to remain competitive in a contemporary environment. Excessive government interference in financial markets disproportionately burdens small intuitions, distorts market forces, and ultimately harms the consumer.
3. H.R. 4545, the Financial Institutions Examination Fairness and Reform Act creates a fair federal financial examination appeals process for community banks. This bill establishes an independent review office that would provide uniformity to the appeals process and its standards, as well as implement timeliness expectations in decisions about appeals and increase transparency in the process.
4. H.R. 4263, the Regulation A+ Improvement Act of 2017, increases the amount of securities that a company can offer without registration with the Securities and Exchange Commission (SEC) to $75 million over a 12-month period from $50 million. What that basically means is that it would allow rising companies to gain additional investors and increase their access to capital, which helps our economy grow.
These bills are yet another step the House is taking to make the regulatory process more transparent for Americans. I support reducing burdensome regulations for our Virginia businesses and will continue to do so. For a free-market economy to function the way it should, it is important for the government to have minimal involvement. I’m proud to stand for legislation that holds Washington accountable.
