Issues Outlined in ABA's Hometown Banking Agenda
Despite personal political affiliations or differences of opinion, it’s important to stay abreast of what’s happening in Washington if you seek to influence the direction of your industry. As with any industry, there are many outside forces that impact how you do business, and the American Banker’s Association Hometown Banking Agenda might be such a factor. This Agenda outlines the ABA’s legislative initiative for the nation’s banking system – seeking to level the playing field and ensure banks have appropriate flexibility to meet consumer needs.
Here are the fundamental issues outlined in the Agenda:
- Provide a level playing field and charter choice. A diverse and safe banking sector must provide charter (ownership structure) flexibility while ensuring that all financial services providers compete on a level playing field. Non-bank competitors and all other financial services providers must be subject to the same rules that protect consumers and the financial system.
- Remove impediments to serving customers. Excessive regulation and overzealous enforcement can be disincentives to banks providing customers the products and services they want and need. The Hometown Banking Agenda seeks to reform overly prescriptive rules – including elements of the Consumer Financial Protection Bureau’s suite of mortgage rules – that have discouraged banks from flexibly serving customers’ market segments. This section of the Agenda revisits fair lending principles and capital requirements to increase lending, which are often seen as overly burdensome and unnecessarily complex. The goal is to free up bank resources spent complying with the current regulation and enhance banks’ flexibility to tailor products to meet individual customers’ and markets’ needs.
- Protect the payments system. Maintain banks' responsibilities as stewards of the payments system within a regulatory environment that promotes innovation, consumer protection, system integrity and a level playing field for all involved. This ensures that all participants – banks and nonbanks – are subject to the same rules and oversight in order to protect consumers and discourage overall risk to the system. The ABA wishes to promote a secure regulatory system that supports bank innovation in payments and eliminate artificial price controls, such as interchange fee caps, that impede innovation.
- Cybersecurity and data breaches. Banks employ high standards of cybersecurity to protect customers, while other parties that experience breaches of customer data impose enormous costs on banks and their customers. The balance of responsibility must shift. Banks and the federal government must continue to build on their strong public-private partnership, sharing resources to combat the ever-present international threat of cyber terrorism. This means that all parties (banks, retailers and other businesses) must share similar standards and accountability for protecting customer information and notifying the public after a breach. The ABA seeks to expand public-private efforts to fight cyber threats by facilitating collaboration, information sharing and self-reporting of internal weaknesses without fear of regulatory sanctions or reputation risk. And as such, the ABA supports strong efforts by law enforcement to prosecute wrongdoers.
- Regulation must be appropriate to business models. Recent expansions in regulation have placed overwhelming burdens on many banks, greatly impeding their ability to serve their communities. A long-term vision for regulation is needed that tailors rules to suit the industry's diverse business models and risk profiles. Any new model for regulation must provide substantial regulatory reductions without impeding the flexibility to serve evolving customer needs.
The American Banker’s Association Government Relations Council reviews and recommends the legislative agenda for the Association, including the Hometown Banking Agenda. I, along with other bankers from across the country, serve on this Council, and we are committed to refining legislation that enables financial institutions like Bank SNB to better serve our customers in a responsible manner.
On the Mark was written by Bank SNB President and CEO Mark Funke.