+
September 2015
11
Community Bankers Association of Illinois
Bank
notes
by community banks, and CBAI
believes that regulations should be
tiered to reflect those differences.
The regulatory burden imposed on
community banks by a one-size-fits-all
approach ignores the disproportionate
burden of banking laws and regulations
on community banks. The steady
increase in regulations over many
decades threatens community banks
and their communities. CBAI urges
Congress and regulators to continue to
expand and refine a tiered regulatory
system based on size and risk profile.
“The One-Voice Myth”
The various financial associations do
work together on issues of mutual
position and interest such as credit
union and FCS taxation. However,
Main Street and Wall Street do not
see eye-to-eye on certain critical issues
such as tiered regulation based on bank
size and downsizing the mega banks to
resolve too-big-to-fail. Despite these
major differences, the associations
representing mega banks often promote
the notion that all banks would be
better off speaking with one voice.
That’s really code for the elimination
of autonomous representation for
community banks. CBAI calls it “The
One-Voice Myth.”
If all banks are the same, then
more than 500 community banks
would not have been closed by the
regulators since 2008.
The enormous size and complexity
of the Wall Street mega banks and
financial firms compelled policymakers
and regulators to bail them out during
the financial crisis. Community bankers
have no illusions that they would
be saved. If their banks fall below
certain minimum regulatory capital
requirements, they will be closed,
period. This grotesque double standard
destroys our free-enterprise system
and threatens the very existence of
community banks if not resolved soon.
If all banks are the same, then
Wall Street would not have a
funding advantage over Main Street
community banks.
Two economists at the International
Monetary Fund (IMF) have determined
that Wall Street enjoys an annual $83
billion too-big-to-fail subsidy. Bloomberg
View’s analysis characterizes this advan-
tage as a competitive imbalance, a market
distortion so egregious that even the often
fractious United States Senate voted 99-0
in support of a resolution to end taxpayer
subsidies for the mega banks.
If all banks are the same, then
regulatory burden would fall equally
on all banks.
Regulatory burden, however, falls
disproportionately on community banks
•
American Bankers Association (ABA)
•
Financial Services Forum
•
American Council of Life Insurers (ACLI)
•
Securities Industry and Financial
Markets Association (SIFMA)
•
Payment Card Industry (PCI)
•
American Insurance Association
•
The Clearing House
•
Investment Company Institute
•
Financial Services Roundtable
•
Financial Institutions Association (FIA)
•
Consumer Bankers Association
•
Institute of International Bankers
•
Center for Capital Markets
•
Equipment Leasing and Finance Association
•
American Financial Services Association
Trade Associations Representing Wall Street Mega Banks:
Rick Jameson
(First Community
Bank and Trust,
Beecher); Doug
Parrott (State
Bank of Toulon);
Kraig Lounsberry
(CBAI); Ammon
Simon (Legislative
Counsel –
Congressman
Hultgren); Ryan
Heiser (The Fisher
National Bank);
David Stanton
(PeopleFirst
Bank, Joliet);
Mike Estes (The
Fisher National
Bank); David
Feldhaus (Federal
Home Loan Bank
of Chicago);
Julie Welborn
(The Fisher
National Bank);
Keith Douglass
(Tomkins State
Bank, Avon);
Tony Sisto (STC
Capital Bank,
St. Charles);
Congressman
Randy Hultgren
