In testimony before the Senate Banking Committee today, Federal Reserve nominee Michelle Bowman highlighted the critical role that community banks play in growing the economy, and offered support for more closely tailored regulation for these institutions. Bowman — who has been tapped to fill a seat on the board reserved for a community banker — provided insights from her career as a former bank executive at Farmers & Drovers Bank in Council Grove, Kan., and her current role as Kansas state bank commissioner.
“At the state level, I oversee banks that range in size from $7 million in assets with three employees to $3.2 billion in assets. All of those qualify by the federal standard as community banks,” Bowman said. “It’s important to be able to understand the burden on a staff of three to implement the same regulations that apply to much larger institutions.”
In addition to regulatory relief for community banks, both Bowman and Fed vice chairman nominee Richard Clarida also expressed their openness to the modernization of the Community Reinvestment Act, as well as their support for the normalization of the Fed’s balance sheet. They also offered support for preserving the government guarantee on 30-year fixed-rate mortgages.
With regard to capital and liquidity requirements for the nation’s largest banks, Clarida assured lawmakers that he would not sacrifice gains in safety and soundness in any effort to simplify or loosen these requirements. “If I am confirmed, my priority will be to support policies that are effective, efficient, and appropriately tailored and that preserve the far greater resiliency and stability of the financial system that has been achieved as a result of the significant reforms that have been put in place since the financial crisis,” he said.
