Banks are a source of strength for the U.S. economy, but Congress could do more to support the industry by passing legislation to promote de novo bank formation, level the playing field with nonbank competitors and eliminate regulatory uncertainties, Jim Reuter, CEO of FirstBank of Colorado, said today in testimony before the House Financial Institutions and Monetary Policy Subcommittee.
Speaking on behalf of his bank and the American Bankers Association during a hearing on revitalizing banking, Reuter noted that banks played a critical role in keeping the nation’s economy afloat during the height of the COVID-19 pandemic. “We come here today with a healthy robust banking industry continuing to meet the needs of Americans,” he said. “However, like many industries in this country, we face challenges from uncertain economic and business conditions. And despite that, we expect to remain strong and resilient going forward.”
Reuter provided several examples of bipartisan legislation supported by ABA that would help banks, such as the New Markets Tax Credit Extension Act, the Affordable Housing Credit Improvement Act, and the soon-to-be-introduced Access to Credit for our Rural Economy Act. He also pointed to legislation such as the Promoting Access to Capital in Underbanked Communities Act, which would establish a three-year phase-in period for new banks to comply with federal capital standards, helping promote de novo formation.
Reuter also urged lawmakers to bring greater stability and balance to the Consumer Financial Protection Bureau, noting ABA’s support for the establishment of a Senate-confirmed, bipartisan commission at the bureau. As one example of regulatory overreach, he cited the publication of an “updated” UDAAP exam manual that conflates two well-defined grants of statutory authority, which is the subject of a lawsuit by ABA and other trade associations. When asked about CFPB Director Rohit Chopra’s use of the term “junk fees” to describe legal fees charged by financial institutions, Reuter said that he had never heard Chopra actually define the term. “It’s quite confusing when the fees we are charging are clearly disclosed within compliance of the existing laws, and suddenly one person can interpret that a different way,” Reuter said.