Pub. 7 2018 Issue 2

11 s u mm e r | 2018 F E A T U R E if I could only do two things that would have a broad impact in Virginia I would provide QM status for all mortgages held in portfolio and give community banks the relief they deserve from Basel III. Those issues are addressed in large part in Section 101 and Section 201 of S. 2155. The environment changed “just a bit” in the fall of 2016 and those changes shifted the gears of the regulatory relief bandwagon from second to fourth in short order. The Plan for Prosperity was expanded, from 28 issues to 39. VACB also “geared up”, sending its largest delegation to date to Washington for the ICBA Capital Summit. Spring 2017 brought more mo- mentum. Jeff Dick (MainStreet Bank, Fairfax), VACB’s member on the ICBA Federal Delegate Board, was invited with six other community bank leaders to visit with Treasury Secretary, Steven Mnuchin, about the impact of over- regulation on community banks. A few weeks later, Alice Frazier (Bank of Charles Town) joined Jeff and 98 other ICBA leadership bankers for a meet- ing at the White House. There they received a receptive audience with the President, advocating for common- sense regulatory relief. On November 13, the Senate Bank- ing Committee announced a bipartisan agreement on regulatory relief, and it was introduced three days later as S. 2155. There were 19 original co-spon- sors, 9 Republicans, 9 Democrats, and 1 Independent. The only state with two Democrat Senators co-sponsoring the bill was Virginia. Senator Warner was one of four Democrats who worked with Republican committee leadership to craft the bill, and Senator Kaine’s early sup- port was critical in building momentum for it. It was, to be sure, a compromise bill. Regulatory relief will be available to credit unions as it is to community banks, one section provides a special consideration for credit unions, and some relief is provided to banks outside the community bank space. But ten pro- visions of the bill will help a significant number of community banks, repre- senting a substantial amount of relief than had been offered in all previously adopted “post Dodd-Frank” legislation combined. In December of 2017, the Senate Banking Committee approved the bill on a 16-7 bipartisan vote as Congress finished its year. The battle then turned to the legislative clock. Were there enough legislative days left to get the bill through both houses before the 2018 elections created a fatal dose of partisan gridlock? In late February, VACB was contact- ed by Senator Warner’s office and asked to assist with a meeting in Charlottesville including small businesses and entrepre- neurs, to focus on S. 2155 and barriers to lending. On March 2, twelve bankers from ten member banks met with twenty local residents and had a very produc- tive discussion of the legislation and its provisions. Senator Warner’s passion for the bill was obvious. On March 14, S. 2155 passed by the Senate on a bipartisan 67-31 vote, after harsh criticism from the most liberal Democrat Senators. The bill had reached the limit of how far the moderate Demo- crats were able to move in addressing community bank concerns. The task ahead, then, was to implore the house to take an unusual step: Pass S. 2155 with- out amendment. On March 23, I hand-delivered our plea to each member of the Virginia House Delegation. Many understood the dilemma we faced, and were sympathet- ic. Some Republican members wanted a chance to make the bill “better,” which is not a bad idea in more normal times. But are these times normal in any way? The clock was ticking, the Senate was unlikely to accept any changes. We had to hope that community bank relief was more important than the political debate of “who killed this bill?” We were told that the Virginia Bankers Association had sent a similar letter to the delegation a few weeks later. Twenty-six Virginia bankers took part in the 2018 ICBA Capital Summit in early April. The timing could not have been better for our visits. They thanked senators for their strong support, implored House Republicans to take immediate action and provided House Democrats with solid reasoning to sup- port the bill. ICBA delivered a new petition in May, this time to the House or Repre- sentatives, signed by more than 10,000 bankers, directors and customers, urging immediate passage of S. 2155. The peti- tion included the signatures of nearly 300 Virginians. On May 22, S. 2155 was passed by the House on a 258-159 vote, including 33 Democrats in favor. It was disappoint- ing that none of the four Democrats from Virginia voted in favor of the bill. Two days later, S. 2155 was signed into law by the president. And so, what of the next chapter? here’s a rough first cut : • BSA/AML reform • CRA reform • Repeal of onerous small busi- ness data collection (Dodd- Frank, Section 1071) • Credit Union parity If we are to make more progress, it will require more. More people, more time engaging our delegation, more stories about the impact of regulatory burden on your customers at your bank. Your VACB leadership is extremely grateful for your commitment and en- gagement. The future is now! Ten provisions of the bill will help a significant number of community banks, representing substantially more relief than had been offered in all previously adopted “post Dodd-Frank” legislation combined.