Unless President Obama takes bold action to relieve regulatory burden, the ability of banks – especially community banks – to provide credit to local communities will remain restricted and industry contraction can be expected said Frank Keating, president and CEO of the American Bankers Association.
“All banks and their services to their customers are hurt by overregulation,” said Keating in a letter sent to the President. But, he notes, “community banks are often the most vulnerable to regulatory costs,” and “too much of banks’ resources are being sidelined into regulatory compliance activities.”
Earlier this week, President Obama signed an executive order that requires every federal agency to conduct a systematic review of existing regulations and make a concerted effort to banish red tape at a time when the administration is eager to promote economic growth and improve relations with the business community.
According to the letter, the administration should address relieving the demand for even higher capital rations and end the confusion of mortgage rule makings. The letter states further that the essential contribution of banks to the economy is their ability to bring savers and borrowers together and infuse economic activity in to the community.
Finally, the letter makes clear that the industry is supportive of the administration’s regulatory relief effort and notes that separate letters to appropriate federal agencies and departments are forthcoming and will identify specific regulatory concerns.
“We are eager to assist,” said Keating in the letter. “We will continue to offer additional input as we identify other problem regulations and develop effective solutions.”