Pub. 6 2016-2017 Issue 6

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S A Word From CBA... Customer-Harming Banking Regulations Need Review E nsuring regulations are effective and tailored is common sense and conducting periodic reviews is good govern- ment. More so, reforming regulations that inhibit the abilityof banks to serve customers is critical. Suchanti-customer regulations exist now and make it difficult or impossible to pro - vide loans and other financial services to groups including small businesses, low income individuals, rural residents, the recently retiredandpeoplewhorecentlybecameemployed. Inmanycases, banks would love tomake those loans, but are kept fromdoing so by overreaching government restrictions. The volumeof regulation is staggering. The2,300pageDodd- Frank Act (DFA) added 390 new bank regulations (it’s not done yet) comprising 24,000 pages of new regulations; eight feet of paper on top of an already heavily regulated industry. Not only is a review warranted, it is imprudent not to conduct a thorough audit of these rules to identify their attributes ornegative impacts. The pendulumhas swung too far and the compounding effect of these regulations is hurting customers, communities and our economy by restricting banks’ ability to serve them. Inmany cas- es, the regulations have disparately impacted community banks, not their intended target:Wall Street. The cost and complexity of complyingwith the glut of newrules is pressuring the industry to consolidate, which further hurts customers. A vibrant financial services systemneeds and relies uponbanks of all sizes and today in the U.S., one bank closes its doors every day due to expensive regulatory compliance. Coloradobankers have long advocated formeaningful reform of Dodd-Frank rather than wholesale repeal, so that community banks aren’t continually crushed by one-size-fits-all regulation. Specifically, we support the TAILOR Act by western Colorado’s Rep. Scott Tipton (CO-3, R)whichdirects federal bank regulators toconsider abank’s riskprofileandcomplexityandrequires them to “tailor” their action. The goal is to remove the overwhelming regulatory load and compliance burden where it need not apply, such as when the bank isn’t involved in that activity. Colorado’s other member of the House Financial Services Committee, U.S. Rep. Ed Perlmutter (CO-7, D) co-sponsored this bill last year, creating bipartisan support. It’s our hope this legislation and the Administration’s review will receive bipartisan support. We encourage lawmakers to be open-minded andnot respond reflexivelywithpredictable public statements about protectingWall Street. When their sole focus is onWall Street, they lose sight of the several thousand community banks servingcustomersandcontributing to theeconomicvitality of our communities. It isofutmost importance that theregulations weput inplaceeffectivelyprotect consumerswhileallowingbanks theunfetteredability to judiciously extend to themthe credit they need and deserve. n Don Childears President and CEO Colorado Bankers Association