Chairman Hill: We Can Work Together on Commonsense Reforms That Will Allow Community Banks to Thrive Again
Washington,
February 5, 2025 -
Today, the House Financial Services Committee, led by Chairman French Hill (AR-02), is holding a hearing to examine the current landscape of community banking in the United States, including how community banks serve as the lifeblood for many local communities.
Watch Chairman Hill’s opening remarks here.
Read Chairman Hill’s opening remarks as prepared for delivery:
"Welcome to the House Financial Services Committee’s first hearing of the 119th Congress.
"I’m delighted to serve as chair and look forward to working with my Subcommittee Chairs, Ranking Member Waters, and all members of this Committee to bring common sense back to financial and economic policy that will foster prosperity and growth for all our citizens.
"That’s the change that President Trump ran on, and that’s what we’re going to do in this Committee.
"It’s been nearly a hundred years since the House Financial Services Committee was chaired by someone with firsthand experience working at a bank or financial institution prior to their Congressional service.
"Many of you know I was a community banker before being elected to Congress. I want to bring a banker and businessman’s vision to the Committee, and one of the key pillars of that vision is to Make Community Banking Great Again.
"It’s no coincidence that this is the first hearing of my chairmanship.
"Most countries have just a handful of large national banks, but the U.S. has a large and diverse banking system, with thousands of banks from small and regional institutions to global money center banks that all coexist and work with each other to meet the access to needs of Americans.
"It’s one of our great competitive advantages and a source of strength for our economy.
"When faced with unprecedented uncertainty during the pandemic, community banks made an outsized share of Paycheck Protection Program (PPP) loans to small businesses – keeping Americans employed.
"Community banks know their communities best and research shows that when they close their doors, Americans suffer. Right now, our community banks are disappearing across the country.
"Back in 1999, when I first founded my Arkansas based bank, Delta Trust & Banking Corporation, the United States had over 8,500 FDIC-insured banks, including 190 new bank charters in that year alone.
"Fast forward to today, the United States has just over 4,000 banks, while only 82 de novo bank charters have been issued since 2010.
"Community banks have suffered immensely as increased regulatory requirements force them to devote more and more resources to lawyers and check-the-box compliance programs instead of serving their customers.
"In 1995, Arkansas had about 251 banks; today it’s about 77.
"However, community banks did not contribute to the financial crisis but have continued to serve as critical engines for local economies despite being subjected to much of the same regulatory regime as the largest, most complex financial institutions.
"To form a new bank today, Americans must submit to a multi-year, high-cost endeavor with several different federal agencies before they can open the doors.
"Initial capital requirements can be as high as $30 million in practice, making it nearly impossible to get started as an entrepreneurial banker today. One founder in Texas told me the regulators required $50 million.
"Over the last year, I’ve met with community bankers across America including Arkansas, Texas, Ohio, Florida, Oklahoma, and Louisiana.
"These visits have reinforced my view that we are not doing enough to ensure that banks of all sizes remain competitive, both in their business model and in their ability to attract growth capital.
"That’s why last November, I released my principles on how we can “Make Community Banking Great Again”—30-plus community banking reform ideas to enhance their ability to serve their customers, attract investment, adopt and deploy technology, and to thrive and grow along with their communities.
"To that end, we have attached several discussion drafts that will lay the groundwork for a series of conversations and hearings this Committee will lead throughout the 119th Congress to improve the regulatory landscape and provide solutions to the many challenges faced by community banks.
"Specifically, this Committee will seek to promote regulatory fairness, transparency, and right-sizing; encourage bank health, sound growth, and competition; and improve access to funding and capital for our community banks.
"I also know that Ranking Member Waters, many members on the other side of the aisle, and our colleagues in the Senate Banking Committee care deeply about the community banks in their districts.
"I know that if we put partisan politics aside, we can work together on commonsense reforms that will allow community banks to thrive again, and I look forward to that work."
