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Regulatory Relief for Community Banks and Credit Unions

In South Dakota, our local banks and credit unions play an important role in helping our businesses thrive and our communities grow. Local financial institutions help families buy a home, start a new business or save for the future. As a member of the Senate Committee on Banking, Housing and Urban Affairs, one of my priorities has been to relieve community banks and credit unions from the unnecessary regulatory burdens imposed on them.

I recently joined a bipartisan group of Banking Committee members to introduce a bill that would improve our nation’s financial regulatory framework and promote a healthy economy. Since the enactment of the Dodd-Frank act, which was an over-reaction to the 2008 financial crisis, our financial institutions and our economy have suffered. Our proposal begins to roll back some of Dodd-Frank’s one-size-fits-all regulations, which have been disproportionally hurting small-and-medium sized institutions who had nothing to do with the financial crisis. While there is still work to be done, our proposal is a good step toward allowing community banks and credit unions to expand, and I’m happy that it includes a number of provisions that I introduced.

Included in our bipartisan bill is the Home Mortgage Disclosure Adjustment Act, which provides small banks and credit unions with data reporting relief. It also includes relief from Dodd-Frank capital rules that allows banks to count high-quality municipal bonds toward capital requirements. This will be helpful to both banks and local governments that issue debt.

Our legislation also contains provisions of my Community Bank Access to Capital Act that would free small banks from having to go through arduous and expensive tests mandated under Dodd-Frank, make it easier for banks with less than $3 billion in assets to raise capital and grow. It also includes language that protects the credit of our military veterans who are awaiting delayed payments from the VA Choice program. Lastly, it provides rural appraisal relief for situations when borrowers apply for a loan of less than $400,000 and have trouble finding a qualified appraiser.

In addition to our most-recent bipartisan proposal, I have also introduced a number of different stand-alone bills this year to help improve access to credit for South Dakotans and reduce the regulatory burden of Dodd-Frank on local financial institutions so they can better provide loans and other services to their customers. I continue working to move my TAILOR Act forward in the Senate—this bill would require regulatory agencies to take into account the risk profile and business models of individual financial institutions and tailor their regulations accordingly. This will help put a stop to the one-size-fits-all approach to rulemaking we’ve seen out of Washington during the previous administration.

Making sure South Dakota 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 South Dakota families and businesses who rely on them for credit. I look forward to continue working on legislation that will provide smart, targeted regulatory relief to our community banks and credit unions so they can better serve their customers and boost South Dakota’s economic activity.