Treasury Secretary Jack Lew received an unexpected barrage of questions on regulatory burden for community banks during a Senate hearing on the Treasury Department’s budget for the next fiscal year.
Several senators of both parties quizzed Lew about what the Obama administration is doing to “ease the burdens and compliance costs facing community banks,” as John Boozman (R-Ark.) put it. Boozman’s comments were echoed by Chris Coons (D-Del.), Jerry Moran (R-Kan.) and Barbara Mikulski (D-Md.), who expressed specific concerns about the shrinking number of community banks.
“Community banks have been caught up in a broader regulatory scheme than they deserve to be in,” Moran added, noting that numerous small banks in Kansas have told him they stopped making mortgage loans as a result of the CFPB’s mortgage rules. Moran recently introduced S. 423, an ABA-advocated bill that would streamline the privacy notice process.
Lew insisted that Treasury and the bank regulators look for ways to reduce burden on community banks but defended the Dodd-Frank Act and its implementing regulations, noting that “the oversight we have now is more appropriate than we had in 2008.”