Press Releases

On Friday, the Subcommittee on Financial Institutions, led by Subcommittee Chairman Andy Barr (KY-06), hosted a field hearing in Richmond, Kentucky, to examine the importance of community banks in expanding access to capital, supporting affordable housing, and driving economic growth in local communities. The hearing highlighted how the Main Street Capital Access Act would help strengthen community banks, reduce unnecessary regulatory burdens, and support the formation and growth of new community banks.

On Strengthening Community Banks:

Subcommittee Chairman Barr said, "The Main Street Capital Access Act was developed in response to that one-size-fits-all approach, with the intention to help community banks thrive, expand, and support the growth of new banks. Key provisions in Title II, like the TAILOR Act and my TIER Act and Community Bank Regulatory Tailoring Act, aimed to reduce regulatory burdens on lower-risk and smaller financial institutions by raising asset thresholds and requiring regulatory thresholds to adjust over time for economic growth or inflation."

Rep. Troy Downing (MT-02) said, "Community banks face many challenges that prevent new bank formation or lead to consolidation. In 2008, Montana had 64 state-chartered banks. And today, there are 33. So, we lost almost half. And a lot of this can be traced directly back to the passage of Dodd-Frank."

Subcommittee on National Security, Illicit Finance, and International Financial Institutions Chairman Warren Davidson (OH-08) said, "It's one thing to be regulated by your own state, but there are states that are out there trying to regulate banks in other states. They don't think the national bank regulators do enough, and they don't think your state regulator does enough. They want to apply their state policy to out-of-state banks. [...] For interest rates and usury laws, maybe they're different among the states. But if you're running it, you should be regulated in the state you're in. That was always the way it was viewed until recently, but that's why I introduced the American Lending Fairness Act."

Witnesses Highlight the Importance of Community Banks:

Mr. Timothy Schenk, President and Chief Executive Officer, Kentucky Bankers Association, said, “The Main Street Capital Access Act and the 21st Century ROAD to Housing Act complement each other. Figures show that overburdensome regulations add more than $100,000 to the purchase price of a home. Likewise, overburdensome regulations create significant costs for banks. These costs ultimately increase the cost of credit. These two bills, in the aggregate, would substantially decrease the costs of housing while increasing access to credit, a combination that could substantially address our nationwide housing crisis.”

Mr. Aud highlighted how Main Street promotes new bank formation: “A responsible capital phase-in does not mean a new bank operates without meaningful capital. It does not eliminate oversight or lower the obligations of management and directors. It recognizes that a carefully supervised new bank can build toward its full capital structure as the institution comes along.”

Mr. Jason Hawkins, President and Chief Executive Officer, First United Bank, said, “One-size-fits-all regulation simply does not work for community banks like mine. We face the same regulatory framework as trillion-dollar banks— banks that are literally over 1,000 times our size and operate internationally. We don't engage in derivatives trading. We don't have proprietary trading desks. We don't pose systemic risk to the global financial system. Yet we're subject to many of the same rules, examinations, and compliance expectations. The Dodd-Frank Act subjected community banks to the same rules designed for the largest, most systemically important institutions. This has stifled local lending, constrained economic growth, accelerated industry consolidation, and pushed lending activity outside the regulated banking sector—exactly the opposite of what we need.”

Mr. Zach Worsham, Vice President, Winterwood Inc., said, “…community banks are essential to the development of affordable housing in the United States. The Main Street Capital Access Act addresses overburdensome regulation that stifles the lending activity of small and mid-sized community banks. One of the strengths that community banks bring to affordable housing finance is an understanding of the challenges and opportunities available in their specific communities.”

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