2024 Advocacy Priorities

Community banks are locally based and relationship-focused institutions serving the unique needs of their customers. With a time-tested business model of sound lending and conservative risk management, they are a force for stability and prosperity in their communities.

Safe Harbor for Legal Cannabis Banking

• Pass the SAFER / SAFE Banking Act (S. 2860 / H.R. 2891) to create a federal safe harbor for banking legal cannabis-related businesses.
  

• S. 2860 passed the Senate Banking Committee last year.
  

• The SAFE Banking Act has passed the House seven times in previous Congresses.

Bank Fees

• We broadly oppose price controls and caps imposed by any regulatory agency, which only distorts market discipline and demand for delivery of products and services.
  

• ICBA strongly urge policymakers to cautiously consider the consequences of any future restrictive fee related legislation and regulations, which would have a negative ripple effect on customers who rely on these services.
  

• ICBA opposes any retroactive and punitive action on lawfully disclosed represented item fee practices, especially where those practices were never subject to examiner or regulatory scrutiny.
  

• We remain committed to pushing back and utilizing all resources available against the harmful rulemaking and rhetoric that mischaracterizes contractually negotiated and disclosed fees as “junk fees” in any form. In doing so, we will call for appropriate oversight, hearings, and other measures to hold the bureau accountable to comply with its mandate and governing rules.

Mergers

• ICBA urges Congress to prohibit the acquisition of taxpaying community banks by tax-exempt credit unions. In the interim, we urge the FDIC to create a process to review proposed credit unions acquisitions of community banks to ensure that the resulting credit union can continue to meet the level of community reinvestment as the acquired bank.
  

• ICBA opposes bank mergers that create or enlarge “Too Big to Fail” financial institutions.
  

• On the other hand, we support a de minimis exemption that would allow for expedited review of small community bank mergers that do not create risks to financial stability or competition.

Deposit Insurance

• ICBA opposes uniform increases to base deposit insurance assessments, and encourages the FDIC to consider developing a systemic risk premium to ensure large banks pay for the outsized risk they pose to the DIF.

• ICBA encourages the FDIC to revisit increases to base deposit insurance assessment increases once the DIF reaches its statutory minimum reserve ratio of 1.35%.

• ICBA applauds the FDIC for recognizing that community banks were not the primary beneficiaries of the recent systemic risk determinations for SVB and SBNY and for finalizing an exemption for community banks with fewer than $5 billion in uninsured deposits.

• ICBA will review any future proposals to reform the deposit insurance framework to identify and evaluate implications for community banks, including specifics about the costs, length, and voluntariness of any proposed increases or adjustments to deposit insurance coverage.

Climate/ESG

• Regulators should not apply any climate risk management or climate disclosure frameworks to community banks with fewer than $100 billion in assets.

• The regulators should not force community banks to choke off legal but climate disfavored industries from the financial system.

• Further research is needed to understand whether there is empirical data to support the conclusion that climate risks are a significant threat to the safety and soundness of community banks or the financial system.

FHLB Reform

• The FHLBs must remain a strong, stable, and reliable source of funding for community banks.

• ICBA opposes changes that compromise the System’s regional and cooperative structure.

• FHFA should not permit non-depository entities — which are not prudentially regulated — to access FHLB programs or services.

• FHFA should not move to consolidate the System without the grassroots leadership of its member-owners.

• FHFA should not impose any requirements that could restrict community bank access to the system based on the amount of mortgage lending a bank does.

• Any changes to the mandatory Affordable Housing Program allocation must not compromise the safety and soundness of any FHLB.

Beneficial Ownership

Community banks should not be obligated to collect BOI that has also been directly submitted to FinCEN by a reporting company.

Key Talking Points:

• Since reporting companies are now required to submit BOI directly to FinCEN upon company formation, FIs should not also be required to collect the same BOI.

• ICBA strongly urges against any rulemaking that will require FIs to train, notify, or execute any requirements between reporting companies and FinCEN.

• It is estimated that more than 32 million small businesses would need to register their BOI with FinCEN in 2024.