WASHINGTON – U.S. Senator Roger Wicker, R-Miss., today called on the Senate to include his amendment to protect small community banks from requirements designed for larger financial institutions. Wicker’s comments came during a Senate debate on legislation that would roll back portions of the Dodd–Frank law to allow smaller banks and credit unions to invest more in families and local businesses.

Highlights of Wicker’s speech include:

“My amendment would promote economic growth in rural communities around the country, as well as provide regulatory relief for our small banks.”

“Dodd-Frank has done harm to Main Street. If we want our banks to help grow the economy, we need to be mindful of the ways in which this law’s excessive regulations are hurting small banks. This goes right in hand with the major thrust of this overwhelmingly bipartisan bill.”

“These banks inject needed capital and access to credit in our communities – capital and credit to launch a new local business or create jobs.  When these banks struggle, our communities struggle.”

“To comply with one-size-fits-all Dodd-Frank regulations demands resources that some of our community banks do not have.  Unlike big banks, they might be forced to close because these demands are too high, or they might have to pass along extra costs to consumers.  Neither option helps our local communities and the people who live there.”

Background

Wicker’s amendment is based on legislation that he introduced last summer. It would target the punitive treatment of Trust Preferred Securities held by community banks under Basel III capital rules.  A trust-preferred security is an investment vehicle possessing characteristics of both equity and debt. A company creates trust-preferred securities by creating a trust, issuing debt to it, and then having it issue preferred stock to investors.

These rules were created in the wake of the financial crisis and are being implemented over a four-year period which began January 1, 2015. Approximately 20 small community banks, including nine in Mississippi were severely affected by the rules. Some banks had been operating for over 100 years and were well-capitalized before Basel III.