WASHINGTON–The American Bankers Association has sent its “Blueprint for Growth” to members of the new Congress and the new administration and, as it traditionally has done, the group is alleging “lax regulation” and “government subsidies” to credit unions are hurting communities.
But, consistent with a messaging change it has made in recent years, the ABA’s document specifically calls out “larger” credit unions, as well as “larger” institutions that are part of the farm credit system, saying they “drain deposits from local communities, reduce local tax revenue and lower underwriting standards, harming those communities and the community banks that serve them.
“Differences in the tax status, application of CRA, brokered deposit rules, appraisal standards, capital and regulatory laxity must be addressed,” the Blueprint states, urging Congress and the administration to apply “equal regulation, tax treatment and regulatory oversight to these entities that perform the same functions as financial intermediaries.”
The Priorities
The bullet-point addressing credit unions and the farm credit system appears relatively late in the new ABA Blueprint, which calls on Congress and the administration to “embrace the following priorities”:
· Supporting a Robust Post-Pandemic Recovery. “America’s banks pledge our continuous engagement with communities, consumers, businesses, federal and state authorities and other stakeholders to lift the economy out of the devastating effects of the pandemic,” the ABA said.
· Paycheck Protection Program and Small Business Support.
· Targeted Efforts to Support Communities in Need. “Work closely with government officials and local stakeholders to target support for underserved businesses and consumers, including communities of color, rural areas and distressed neighborhoods,” the ABA said.
· Promote Regulatory Consistency and Support. This includes flexible and consistent regulatory approaches to troubled debt restructuring, Current Expected Credit Loss application, loan loss reserve management and leverage capital levels, among other things, so as not to restrict the availability of future credit, the ABA said.
· Liability Protection. “Protect businesses from liability for good-faith efforts to combat COVID-19 transmission in the workplace—incentivizing the economy to recover as quickly as possible while maintaining safe environments,” the document states.
· Rural Growth. “Pursue pro-growth policies to help farmers manage debt burdens and pricing challenges, fight deposit flight through encouraging access to stable longer-term funding sources and address the shortage of qualified appraisers in rural areas that hinders real-estate transactions.”
· Expand SBA programs.
· Support Housing Markets.
· Cannabis Banking. “Resolve the conflict between federal and state law to permit the banking of state-authorized cannabis companies and related businesses. Seek practical solutions that mitigate pressing state revenue collection, public safety and bank regulatory problems, while eliminating sanction risk for those banks that choose to provide such services,” the ABA recommended.
· Anti-Money Laundering/Bank Secrecy Act. “Implement the recently-enacted beneficial ownership registry and other improvements, including expanded feedback from law enforcement and enhanced information sharing,” the ABA urged.
· Data Privacy. “Support a federal privacy law that preempts inconsistent state laws and applies the same standards to all industries, protects consumer privacy, and does not conflict with existing federal laws such as the Gramm-Leach-Bliley Act.”
· Flood Insurance. Help homeowners to protect themselves with reliable access to the National Flood Insurance Program or through private flood insurance. Advance long-term reauthorization of the NFIP and reforms to strengthen the NFIP financially and to retain its affordability, while also promoting a vibrant private flood insurance market.
· Diversity, Equity and Inclusion. “The responsibility to advance the principles of diversity, equity, and inclusion apply broadly to all business segments and communities throughout the nation, including banks of all sizes and in all communities,” the ABA said.
The full Blueprint can be found here.