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Waters Opening Statement for Hearing on Community banks need easing of regulatory burden, and benefit when larger institutions are appropriately regulated

Ranking Member Waters opening statement at 4-16-2013 Financial Institutions Subcommittee Hearing titled, “Examining Community Bank Regulatory Burdens”

I want to thank the witnesses for taking time to come talk to us today. I know it’s still a challenging time for community sized institutions such as yourselves and it can’t be easy to take time away from your businesses. And I want to get you all back home as soon as possible because we really need you to be out there lending in your communities to help get this economy back on track.

And that’s exactly why we’re here today – we want to know what we can do to help. We understand that there’s quite a bit of regulation that you’re responsible for complying with in your day to day operations, and that burden falls particularly hard on smaller institutions like yours.

There’s not a one-size-fits-all solution to regulation, and I’ve been encouraged by the Consumer Financial Protection Bureau’s recognition of that fact. I understand that Director Cordray has been aggressive in his outreach to community banks and that the CFPB takes your input very seriously. This was recently evidenced by the community bank exceptions in the qualified mortgage rule. That dialogue is leading to results and I hope it continues.

Other regulators have taken note of the importance of community banks to our economy as well. In December, the FDIC released a thorough and enlightening study on community banking that has been quite helpful to our members. And Governor Duke of the Federal Reserve recently highlighted how the Dodd-Frank Wall Street Reform Act is being implemented in ways that consider the size and complexity of the institutions it impacts.

Reading through your testimony, I am reminded that appropriately regulating the larger banks is just as important to your survival as reducing your regulatory burden. There are a lot of advantages to being a large institution, and I have heard many times that small banks feel they are held to a “higher standard,” that regulators pay much more attention to their books, even though community banks were not responsible for the financial crisis. I will continue to support the regulators in implementation of the Wall Street Reform Act to ensure that our financial system is a stable one where small institutions like yours can thrive.

But regulators are only tasked with enforcing the laws that Congress has passed, so it’s appropriate for us as lawmakers to turn our attention to a discussion of what is and isn't working right now, and what we might do to streamline these laws so we can get you back into your communities creating jobs.

As you know, the House has already gotten to work on that by passing the “Eliminate Privacy Notice Confusion Act.”

Our members have received letters from your trade organizations and over the recess visited you in your home districts in order to gather information on other sensible reforms we might pursue  that will help you put more of your capital to work. My staff and I have been reviewing these requests closely, and I look forward to a productive discussion today.

This has been an area of strong bipartisan agreement, and I want to commend Chairman Capito and Ranking Member Meeks on working together to make this hearing possible.

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