As soon as Tuesday, Republicans and Democrats in the U.S. House will have the chance to follow the Senate’s lead and pass S. 2155, the first significant reform of financial rules in nearly a decade.
Many of the common-sense changes in the bipartisan bill will allow my community bank in Northern California to better serve our customers, and not spend so much time and money complying with rules that don’t make sense for smaller banks like ours. It’s a perfect chance for Congress to show that reason can win out over rhetoric, and serious legislating can still get done in Washington, D.C.
Unfortunately, opponents of this bill, which passed the Senate with 67 votes in March, are making one last effort to derail it using fiction rather than fact. One prime example is criticism of a provision that would ease Home Mortgage Disclosure Act reporting requirements on small banks.
I strongly support this provision. It will allow my team to spend more time lending to people and businesses and less time filling out endless paperwork. What this provision will not do, despite the claims of critics, is change the nation’s fair lending laws in any way or result in greater discrimination in lending. As a community banker committed to lending to every credit-worthy borrower I can find, the claims are both illogical and offensive.
The bill passed by the Senate does not do away with HMDA or its very significant requirements for banks. The 1975 law, which requires mortgage lenders to hand over key pieces of information to bank examiners, would remain intact.
This new bill would spare smaller banks that originate fewer than 500 mortgage loans a year from having to collect and report on a new set of data under a requirement that started Jan. 1. This bill would simply bring HMDA requirements back to where they were at the end of 2017. And bank examiners will continue to have full access to every one of our loan files to assess whether illegal discrimination has taken place.
It would be a shame if misinformation surrounding this modest change prevented the House from supporting this bill. I urge Democrats and Republicans to recognize that the real toll of excessive regulation is ultimately paid by customers.
Banks fuel the economy and open doors of opportunity for all Americans. This bill would let us do even more of that, while preserving the safety and soundness we all want and expect. At every congressional hearing I watch, lawmakers from both parties say they want to help their community banks. Voting for S. 2155 does that.
George Cook is CEO of El Dorado Savings Bank and vice chairman of the Western Bankers Association. He can be contacted at firstname.lastname@example.org.