Federal Reserve Chairman Jerome Powell pledged to Congress that the Fed would consider the impact on community banks of any new regulatory initiatives.

Committee Hearing: Testifying before the Senate Banking Committee on Thursday, Powell said community banks know their communities and are better at relationship lending and serving small businesses than larger institutions. Responding to questions from various senators about how federal banking agencies are shielding community banks from regulatory burdens, Powell shared a personal story of how a community bank stepped up during his move to Washington, D.C., to make a loan after a larger institution backed out at the last minute.

Capital Rule: Powell reiterated that a pending capital proposal would not affect community banks, reflecting his testimony earlier in the week before the House Financial Services Committee as well as previous remarks from other regulators. Speaking separately in Washington on Thursday, FDIC Chairman Martin Gruenberg said community banks would not be affected by the final phase of Basel III capital standards, with regulators focusing on applying the pending rules to banks with assets over $100 billion.

Industry Differentiation: ICBA has called on policymakers and the public to distinguish community banks from larger and riskier banks since the immediate aftermath of the failures of Silicon Valley Bank and Signature Bank of New York, leading to the FDIC’s proposal to exempt community banks under $5 billion from paying any special assessment to replenish the Deposit Insurance Fund.

Resources: The ICBA National Campaign—a national public awareness campaign that launched in March to differentiate and elevate community banks among consumers—has supported the differentiation effort. Community banker resources are available in the ICBA National Campaign Toolkit.