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Friday, June 9, 2017

Savarese Makes Case to Senators for Reg Relief

Testifying before the Senate Banking Committee, ABA Chairman Dorothy Savarese urged Congress to “remove regulatory impediments and let us accelerate growth in the American economy.” She urged the Senate to act on several proposals, including bills that would require tailored supervision, enhance flexibility for mutuals and thrifts, provide stress test relief, streamline and ease paperwork requirements and increase mortgage lending, among others. 

Savarese  who is chairman, president and CEO of Cape Cod Five Cents Savings Bank, Orleans, Mass. – emphasized that banks’ resilience in the face of a tough regulatory environment does not abate the need for urgent regulatory reform. 
Loans are growing, but at half the pace they did years before the financial crisis. Is it any accident that both GDP growth and the business startup rate are running well below historical levels, especially at this point in an economic recovery?
Compliance costs have placed a significant burden on community banks in particular, she noted. For example, in a recent analysis conducted at her bank, Savarese found that “right now, over 24% [of non-interest expenses] – one out of every four dollars – goes toward compliance-related expenses. On the mortgage side, it’s over a third.” She added that complying with complex rules and regulations – such as the new HMDA reporting requirements – diverts time and resources away from developing new products and services to meet customers’ needs.

In conjunction with the hearing, which focused on community banks and credit unions, the committee issued 130 submissions it has received related for regulatory relief measures as Congress prepares to draft an “economic growth” bill. The committee is expected to hold another hearing focused specifically on regional and midsize banks. 

Read Savarese's testimony.  
Read the submissions forregulatory relief.

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