For the past eight years, our nation’s small banks and credit unions have been caught in the crosshairs of an onerous regulatory regime built by the Dodd-Frank financial law.  The law’s multibillion-dollar compliance costs have hampered the important roles these local banks play.  Now, with a new bipartisan bill for banking reform, the Senate has a good chance of providing much-needed regulatory relief to the smaller financial institutions that serve our communities.

I support this aggressive rollback of Dodd-Frank’s harmful regulations and look forward to the bill reaching the President’s desk.  Having cast a firm “no” vote when Dodd-Frank was considered by the Democrat-led Senate in 2010, I believe this relief is long overdue.  The law’s onslaught of red tape was not the answer to the 2008 financial crisis nor a substitute for real consumer protections.  Americans in rural areas are among those especially hurt when their community’s only financial institution cannot meet Dodd-Frank’s big-bank requirements.  The new Senate bill would protect small banks from these requirements, stipulating that banks must have at least $250 billion in assets, much higher than Dodd-Frank’s $50 billion threshold.

Consumers Are Left Empty-Handed as Small Banks Close

Without these protections, many small banks have found that dealing with high compliance costs and a climate of regulatory uncertainty is unsustainable.  Since Dodd-Frank, community banks have closed or consolidated at an alarming rate, ultimately leaving consumers and small businesses with fewer choices for their finances and less access to job-creating capital.  Small banks simply do not have the financial or human resources to comply with regulations designed for big financial institutions. Moreover, as small banks merge, the big banks get even bigger.

Community banks were not responsible for the economy’s downturn.  However, they can help strengthen its resurgence as the primary source for small business loans under $1 million.  This access to capital could make the difference for first-time homebuyers or an innovative startup.

Wicker Amendment Would Help Mississippi’s Rural Banks

To empower our small banks and their services to consumers, I have put forward an amendment to the banking reform bill that would exempt small banks from specific rules on capital that were designed for large financial institutions.  My amendment would benefit several rural banks in Mississippi, which have not been spared from these burdensome capital requirements. 

The central role that small banks play in our local communities cannot be overstated.  The success of Main Street should not be jeopardized by Washington’s bureaucratic reach to rein in the excesses of Wall Street.  Community banks are directly connected to the people they serve.

Given the return of high business optimism and positive economic news, now is a golden opportunity to offer our small banks the relief they need.  The Senate’s banking reform bill would do that, once again demonstrating the commitment by Republicans to remove costly regulations impeding economic growth.  The bill’s broad support suggests that even Democratic lawmakers who supported Dodd-Frank now recognize its flaws and the ways in which the law has not changed the banking landscape for the better.