Georgians See Relief on Horizon as House Sends Dodd-Frank Reform to President Trump

Press Release

Date: May 22, 2018
Location: Washington, DC

Today, the U.S. House of Representatives passed the "Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155)" to drastically reform and reduce the many excessive regulations placed on local financial institutions by the Dodd-Frank Act, which had a disproportionately negative effect on community-based entities and the customers they serve. When the Dodd-Frank Act was passed, it was billed as Wall Street reform, but smaller institutions -- such as local banks and credit unions -- lacking the personnel and financial resources of larger firms found themselves unable to compete and serve the needs of the community. U.S. Rep. Rob Woodall (GA 07) supported the measure and called it much-needed relief for customers and local lenders alike.

"I thank Rep. Woodall for his support of S. 2155, the "Economic Growth, Regulatory Relief and Consumer Protection Act,'" said Gwinnett-based Peach State Federal Credit Union CEO Marshall Boutwell. "This bipartisan regulatory relief will reduce the red tape for Americans trying to get capital, foster economic growth, and empower Americans to make independent financial decisions. The growth of federal regulations on Georgia's community financial institutions negatively affects our ability to serve consumers and has contributed to the consolidation in our industry because of the cost and burden of compliance. The common sense reforms in S. 2155 provide relief and will allow credit unions like Peach State to continue to focus on serving consumers, rather than meeting arbitrary measures of regulatory compliance."

When small institutions are unable to absorb increasing regulatory costs, they must pass them on to their customers in the form of higher interest rates and fees, merge with a larger institution, or as was often the case in recent years, close their doors. In the aftermath of Dodd-Frank, small banks and credit unions could not keep up with the personnel requirements of the excessive new regulatory framework, and in many cases were prohibited from even offering products and services that their customers sought. The bipartisan reforms contained in S. 2155 that will soon be signed into law, have proven to be a welcome sight for many.

"Delta Community believes section 101 (of S. 2155) will provide relief from certain disadvantageous requirements within the Qualified Mortgage (QM) rule for home loans we hold on our balance sheet," added Delta Community Credit Union CEO Hank Halter. "With these particular loans, we retain the risk and are generally confident with our ability to effectively manage this risk given our close relationship with members and familiarity with their personal circumstances. The loans on our balance sheet are still subject to regulatory supervision and testing through our annual Safety and Soundness Exam. Without the relief being considered under section 101, we and other lenders would be required to apply the QM rule with a one-size-fits-all approach, which may preclude us from making more deeply informed and personalized loan decisions. In such an instance, some borrowers will be declined and not have the opportunity to own a home."

Broad support for S. 2155 is found not only on both sides of the political aisle, but also includes: American Bankers Association; the Bipartisan Policy Center; the Credit Union National Association; the Financial Services Roundtable; the Independent Community Bankers of America; the National Association of Home Builders; the National Association and Housing and Redevelopment Officials; the National Association of REALTORS; the National Federation of Independent Business; and 50 state bankers associations.

What else are they saying?

"I appreciate the efforts of the House, and especially Congressman Woodall, in passing S.2155," said Georgia United Credit Union CEO Debbie Smith. "This bill is a carefully crafted bipartisan bill that includes common sense improvements to the nation's financial rules that will allow community institutions, like Georgia United, to better serve our members and communities. It will open doors for more creditworthy borrowers and businesses, and will contribute to local economic growth and job creation."

"Georgia Credit Unions are extremely pleased that the House has passed S. 2155 and that regulatory relief is on the way for community-based financial institutions," Georgia Credit Union Affiliates President & CEO Mike Mercer said. "We applaud the efforts of those members of the House and Senate who voted for S. 2155, the bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act. This common sense bill delivers on its promises and keeps important consumer protections in place while allowing community-based financial institutions -- like credit unions -- to do their job and improve the financial well-being of the working families they serve. One key element of the bill will allow financial institutions to further help protect seniors from elder financial abuse. Other key provisions in this bill ease mortgage lending, and free up capital for small businesses. These essential steps will help grow an economy that has suffered from both a financial crisis and the impact of regulations that treat all financial institutions the same without focusing on the bad actors who led us into the financial crisis."

"I want to thank the House for their efforts to bring common-sense regulatory relief to community based financial institutions," said Atlanta Postal Credit Union CEO Charles Head. "One area that will allow our credit union to help with economic development is the release of arbitrary constraints on credit unions lending for one to four family, non-owner occupied residential property. When a bank makes a loan on a unit such as a duplex, it is a mortgage loan. If a credit union makes the same loan it is classified as a business loan, which goes against the credit union business lending cap that was put into place during the late 1990's; prior to this addition credit unions had no business lending cap. S. 2155 gives credit unions parity with the banks and will free up capital for other small business loans. Thank you, Rep. Woodall, for understanding that helping credit unions is also helping your constituents."

Woodall concluded by thanking those who had played an integral role in crafting the consensus solution now headed to the White House for President Trump's signature.

"Irrespective of intent, the Dodd-Frank Act put an undue burden on our small-town banks and local credit unions across the Seventh District, the State of Georgia, and the entire country," Woodall said. "As they have said, it left them unable to compete against the large institutions, and worse yet, unable to serve their neighbors like they always had. The bill we passed today reforms those misguided regulations to restore the freedom to offer customers the financial products and relationship-based services they want, and I'm grateful for the prolonged partnership of our leaders here at home who have invested so much time and energy to getting the right reform to the President's desk for signature."