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Dec. 21, 2022
As we near the waning days of another thrilling and unforgettable year, I remain awed by the endless energy and devotion community bankers dedicate to serving as effective advocates in Washington.
In 2022, ICBA and community bankers stood together against a steady stream of efforts to impose harmful policies while working tirelessly to advance initiatives benefiting local communities—proving once again the importance of making our voice heard in the nation’s capital.
This week’s release of the end-of-year congressional omnibus illustrates the effectiveness of ICBA and community banker advocacy.
Durbin Amendment: Lawmakers excluded from the spending deal an ICBA-opposed effort to impose new Durbin Amendment routing restrictions on credit cards following tireless advocacy and ICBA’s release last week of new polling conducted by Morning Consult showing consumer opposition to the proposal.
Other Key Issues: ICBA and community bank advocacy also helped ensure the omnibus:
Leaves out a host of other ICBA-opposed proposals, including establishing a postal banking pilot program, new overdraft restrictions, and expanded credit union authority.
Includes an ICBA-supported extension of the National Flood Insurance Program.
Provides an increase in funding for the Community Development Financial Institutions Fund and directs the fund to address concerns with changes to the certification application, which ICBA and other groups have raised.
Includes funding for the Office of Terrorism and Financial Intelligence for improved blockchain analysis tools, training on crypto-related investigations, and investigative support to reduce crimes related to ransomware or crypto.
Outlook: With the 118th Congress set to convene next month, ICBA will continue advocating on unfinished legislative priorities, including passing a cannabis banking safe harbor and closing the industrial loan company loophole.
While our work continues, community bankers this year made positive strides on numerous top-priority advocacy initiatives.
Crypto: ICBA and community banks showed leadership by vocally warning Washington of the security risks posed by crypto-assets, opposing the creation of a U.S. central bank digital currency, documenting the impact of crypto instability, and releasing polling on consumers’ crypto skepticism. These efforts have directly influenced the debate over crypto regulation, with policymakers such as Treasury Secretary Janet Yellen reflecting ICBA’s positions.
Credit Unions: We’ve also amplified state community banking associations’ successes in countering the credit union power grab in states such as Nebraska, Mississippi, and Colorado to influence the national debate, with Federal Reserve Governor Michelle Bowman calling on regulators to rethink how they evaluate bank mergers due to credit union acquisitions.
Climate Risk: Given policymakers’ growing focus on climate risk, ICBA has been out in front on this issue urging regulators to not impose climate risk regulations on community banks. ICBA has expressed concerns with the FDIC and OCC climate risk proposals for larger institutions, noting they could ultimately apply to community banks. It has also said the SEC’s climate risk plan—which includes no exemptions for smaller institutions—would discourage financial institutions from doing otherwise lawful business and participating in the public capital markets.
Tax: The fight to keep bad policies off the backs of community banks and the communities they serve was very real as Congress debated tax policy. Following strong ICBA advocacy as Congress considered its reconciliation package, lawmakers left out new taxes on Subchapter S shareholders, higher capital gains or individual tax rates, and any reconsideration of the IRS bank reporting proposal we took the lead in opposing last year through the #KeepMyBankingPrivate initiative.
In addition to these 2022 advocacy successes, ICBA and community banks also have:
Continued to lead the charge against higher deposit insurance assessment rates and for regulators to align their capital rules to avoid penalizing community banks for their pandemic response.
Opposed the FDIC’s changes to its supervisory appeals structure.
Led a grassroots campaign against the Consumer Financial Protection Bureau’s 1071 small-business data collection rule and for legislation to mitigate its impact.
Called on regulators to ensure Community Reinvestment Act modernization minimizes burdens on community banks.
Raised concerns about misguided policy efforts to target overdraft fees and to impose restrictions and unlimited liability for peer-to-peer fraud.
Testified against and led grassroots opposition to direct Small Business Administration lending under its 7(a) program, contributing to House and Senate legislation that would bar SBA 7(a) direct lending.
Called for Farm Credit System cyber regulations as strong as those that apply to banks and led grassroots advocacy on behalf of the ECORA Act, which would exempt from taxation interest income on farm real estate and rural mortgage loans to help level the playing field with the FCS.
Helped advance through the House bills to expand consumer access to online notarization and support de novo formation.
Told policymakers reviewing the Federal Home Loan Bank system that it would oppose any effort to compromise the system’s regional and cooperative structure.
Alerted Congress to the negative impact of a Treasury Department proposal to revise the CDFI Fund’s application for CDFI certification.
Commended the OCC for renewing its Mutual Savings Association Advisory Committee charter.
Worked with the Cybersecurity and Infrastructure Security Agency to launch ICBA-exclusive exercises that support community bank cybersecurity.
With ICBA and community bankers working nonstop in 2022 to advance positive policy reforms and to block the passage of harmful policies, our efforts in both respects will continue. As we look to the holidays, let’s continue to stand strong together, finish our business, and recognize that we have once again this year fully dedicated ourselves to the community banks and local communities that we are truly blessed to serve.
Rebeca Romero Rainey is the Independent Community Bankers of America president and CEO.
