CONGRESSMAN RUBÉN HINOJOSA CO-SPONSORS REGULATORY RELIEF LEGISLATION FOR COMMUNITY FINANCIAL INSTITUTIONS
Washington, D.C. – Today - Congressman Rubén Hinojosa (D-TX-15) joined several of his Democratic colleagues on the House Financial Services Committee in introducing legislation in the House of Representatives today. The legislation, entitled the Traditional Banking Regulatory Relief Act, will provide much needed regulatory relief for local banks. It is modeled after a proposal from Federal Deposit Insurance Corporation (FDIC) Vice Chairman, Tom Hoenig.
“Community banks and credit units are the lifeblood of our local and rural communities. These main street financial institutions have a unique understanding of our local community and how they practice relationship-based business – helping families purchase homes, farmers plant crops, and small businesses get off the ground. These local institutions did not cause the 2007-2008 financial crisis, and yet, they have been forced to bear the burden and expense of a regulatory framework designed for the mega banks. I am proud to stand with local banks and credit unions today and co-sponsor this important legislation.”
The legislation places no size limitations on financial institutions eligible for relief, but does limit such relief to banks or credit unions who focus their business on the traditional lending activities of taking deposits and making loans to their communities. Only financial institutions that are well capitalized and do not hold risky trading assets or derivative positions are eligible for relief under the bill. The Traditional Banking Regulatory Relief Act will provide significant regulatory relief for roughly half of all U.S. banks on day one without hurting the safety and soundness of our financial system.