Economic growth requires a robust, competitive banking system, and the Dodd-Frank Act and current regulatory environment inhibit that, Senate Banking Committee Chairman Richard Shelby (R-Ala.) said today at ABA’s Government Relations Summit.
“Given the increasing cost of multiple layers of compliance, it should come as no suprise that fewer and fewer are applying for new bank charters,” he said, which “leads directly to economic stagnation.” Meanwhile, he added, arbitrary asset thresholds with “no evidentiary basis” are applying inappropriate regulatory treatment on existing banks and restricting credit for their customers.
Shelby contrasted his vision to the approach touted by some of regulating banks as public utilities. “Such an approach would reduce competition and consumer choice… limit innovation… and escalate the problem of too big to fail,” he said. “I don’t want our banking system to become Amtrak.”
Shelby said he continues to work on building support for S. 1484, his financial regulatory reform law that is part of ABA’s Agenda for America’s Hometown Banks. He said he hopes to move the bill — ideally in its entirety — and hinted that he would attempt to push the bill in a lame-duck session after the November election. “I remain willing to work with senators from both parties,” he added.