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ICBA released findings from a study showing that while small-business owners prefer community banks, increasingly burdensome and complex regulations threaten to restrict small-business lending.
Highlights: According to “Finding Balance: How Well-Intended Policies Hamper Small Business Lending and Undermine Relationship Banking:”
95% of surveyed small-business owners were satisfied with their overall experience partnering with community banks, with nearly 9 in 10 citing products and services unique to small-business needs.
Community bank regulatory burdens continue piling up, with more than 9 in 10 ICBA-member community bankers saying the current regulatory environment is more challenging than it was five years ago.
New rules are expanding regulatory mandates, with more than 80% of community bank respondents saying new 1071 data collection and reporting rules would inhibit their small-business lending.
Policymakers can alleviate the burden, such as by nullifying and rewriting the 1071 rule, exempting community banks from new rules targeting larger institutions, and rigorously evaluating regulatory burdens.
Advocacy: ICBA shared the findings in a national news release and in a letter to the federal banking agencies and Consumer Financial Protection Bureau. In its letter, ICBA urged the agencies to exempt community banks from new rules, right-size data collection requirements, and enhance regulatory flexibility.