Community lenders call for changes to rules on mortgages

Exempting financial institutions with consolidated assets of $50 billion or less from Basel III capital requirements is at the top of this year’s legislative and regulatory priority list for the Independent Community Bankers of America.

Like legislative priorities recently released by credit union trade associations, the ICBA’s list is heavy on regulatory reform.

Besides a Basel III exemption, the community bankers’ list also includes reforms to Consumer Financial Protection Bureau regulations on mortgages and mortgage servicing, consistent standards in evaluating fair lending practices and examination reform.

ICBA’s two-page list includes opposing the increase of the member business lending cap and supplemental capital for credit unions if the industry’s tax status is kept intact.

Reps. Ed Royce, R-Calif., and Carolyn McCarthy, D-N.Y., introduced bipartisan legislation last month that would more than double the business lending cap for credit unions to 27.5 percent. The current cap is 12.25 percent of assets for eligible credit unions.

ICBA is also calling to eliminate the credit union tax exemption.

“Our policy agenda is focused on minimizing the negative impact of excessive regulations, addressing the overly aggressive examination environment and minimizing risks to our financial system,” said Bill Loving, incoming ICBA chairman and president and CEO of Pendleton Community Bank in Franklin, W.Va.

ICBA announced its priorities during its annual convention March 11-15 at Wynn Las Vegas, which the lobbying group said drew more than 3,300 attendees.

ICBA Bancard, the trade association’s payment-services subsidiary, used the convention in Las Vegas to launch its digital wallet pilot program, V.me by Visa Inc. ICBA Bancard is expected to release the service to all its debit and credit card clients by June 30.

The digital wallet lets consumers pay for goods by using their smartphones.

Federal Deposit Insurance Corp. Chairman Martin Gruenberg delivered an upbeat assessment of the banking industry in a speech to more than 200 attendees. He said despite the damage suffered from the recession, the industry has posted three consecutive years of improvement.

Gruenberg said FDIC data have been moving in “a positive direction over this period.”

There were 51 bank failures last year, down from 92 in 2011. The problem-bank list, which peaked in March 2011 at 888 institutions, fell to 651 last year.

The FDIC’s Deposit Insurance Fund, which was more than $20 billion in the red three years ago, is back in the black at $33 billion.

“Despite the historic challenges they have faced as a result of the recent crisis, the vast majority of community banks came through this crisis in pretty good shape,” Gruenberg said. “We have also learned a great deal about business models that proved highly vulnerable to the stresses of the crisis and those that have held up under the stress.”

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.
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