U.S. Senators Mike Rounds (R-South Dakota) and Angus King (I-Maine) have introduced a bill that would give community banks, small businesses, and credit unions a say in the Consumer Financial Protection Bureau (CFPB)'s rulemaking process, according to an announcement from Rounds.
S.1963, also known as the Bureau of Consumer Financial Protection Advisory Board Enforcement Act, would create a small business advisory board within the CFPB. It would also make permanent community bank and credit union panels within the CFPB.
Under the new bill, each panel would be required to adequately represent members from rural and underserved areas, according to Rounds' announcement.
"As the CFPB continues to make decisions that affect every American, it is critical for rural areas, community banks, small businesses and credit unions to have a voice," said Rounds, a member of the Senate Banking Committee. 'This is particularly important in rural states like South Dakota. Our bill makes certain that voice will be heard."
The CFPB currently has four advisory boards for setting policy, only one of which, the Consumer Advisory Board, is required by Dodd-Frank. The new bill would create an additional advisory committee for small businesses in addition to codifying two existing advisory boards, the Community Bank Advisory Board and the Credit Union Advisory Council.
"Small businesses, community banks and credit unions are invaluable forces in America’s economy, and they deserve a seat at the table as the CFPB makes important and far-reaching financial decisions," King said. "Rural communities in Maine, South Dakota, and all across the nation rely on these institutions to create jobs and grow the local economy. I’m proud to stand with Senator Rounds, my fellow former governor, on behalf of rural America."
The bill introduced by Rounds and King is one in a series of bills introduced this year in an attempt to gain regulatory relief for community banks and credit unions, many of which have said they have had difficulty operating due to the increasing cost of compliance with the new regulatory regime under Dodd-Frank. Many of those institutions have either gone bankrupt or merged with other institutions in the last five years.
A similar bill, H.R. 1195, passed in the House in April. In late July, the House Financial Services Committee approved a series of bills that would offer regulatory relief to community banks and smaller financial institutions.
"After five long years of Dodd-Frank’s misguided regulatory assault on Main Street, I’m pleased the Financial Services Committee once again acted to provide regulatory relief for our community financial institutions and the hardworking Americans they serve. Washington’s one-size-fits-all rulemaking has shifted Dodd-Frank’s compliance costs down to many individuals and families—forcing them to absorb higher cost of credit while reducing their access to popular financial products," said Rep. Randy Neugebauer (R-Texas). "This ‘new normal’ is unacceptable. As Chairman of the Financial Institutions and Consumer Credit Subcommittee, I will continue to work in a bipartisan manner and advocate for well-tailored consumer protection that does not infringe upon consumer choice, or the ability of the American people to achieve greater opportunity."