Small Community Banks and Credit Unions Make Up All of ND’s Financial Institutions – 3/5 of Which Would Could Benefit from Senator’s Bill to Expand their Relationship Home Mortgage Lending
BISMARCK, N.D. – August 7, 2015 – (RealEstateRama) — U.S. Senator Heidi Heitkamp introduced legislation to strengthen investments in local towns and neighborhoods by expanding small banks’ access to credit, allowing them to provide more affordable home mortgages to the individuals and families in their communities.
Currently, small financial institutions operate under regulations designed to keep larger financial institutions in check – but are often too strict for community banks and credit unions, and hinder them from expanding needed relationship-lending to local families, farmers, and entrepreneurs. Heitkamp’s Relationship Lending Preservation Act works to change that by requiring the Consumer Financial Protection Bureau (CFPB), which oversees home mortgage lending, to tailor its rules so they work better for smaller financial institutions. By creating practical, more flexible standards that safeguard community banks and credit unions from disproportionate legal risk, Heitkamp is continuing her work to support commonsense policies that protect the ability of community banks and credit unions to grow their important work helping North Dakota families and businesses succeed.
Across North Dakota, small banks and credit unions make up the entirety of the state’s financial institutions – three-fifths of which would benefit from expanded credit under Heitkamp’s proposed legislation – and community banks handle 82 percent of in-state deposits in North Dakota, reinforcing their important to families and businesses in the state.
“Growing strong homes, communities and families in North Dakota is at the heart of what our small banks help make possible every day, and we can support their efforts by refining federal rules to encourage – rather than hinder – their expansion,” said Heitkamp. “My legislation works to steer away from a one-size-fits-all strategy toward measures that better serve our families and entrepreneurs who wish to invest in North Dakota communities. By tailoring current home mortgage rules designed to keep bigger banks in check, my bill would help make sure smaller banks aren’t deterred in practice from expanding their needed services to the families and neighbors they know in their communities. Making commonsense fixes that protect our community banks and credit unions from disproportionate risks will help provide the flexibility they need to encourage more families to build their lives in our towns and cities for generations to come.”
“The Independent Community Banks of North Dakota is proud to support Senator Heitkamp’s work to keep our trusted hometown banks competitive by endorsing her bill to give our smaller local banks the flexibility they need to continue providing the relationship-based service North Dakota families count on when they invest in homes in our local communities, helping our state flourish over the long term,” said Barry D. Haugen, President of the Independent Community Banks of North Dakota (ICBND).
This week, Heitkamp urged CFPB Director Richard Cordray to implement commonsense reforms to give small financial institutions the flexibility they need to sell home mortgage loans to the Federal Home Loan Banks (FHLB) – often their only method of expanding available credit – without the deterrent of being held to the same regulations written for bigger banks. Credit unions and community banks remain key resources for North Dakota families: North Dakota’s financial institutions are entirely represented by small banks and credit unions, with 80 community banks as well as 38 credit unions that serve 215,500 members across the state. North Dakota credit unions alone hold $3.34 billion assets, with 10 credit unions holding more than $100 million in assets.
Heitkamp’s legislation is supported by the Council of FHLBanks, the Independent Community Bankers of America, ICBND, the American Bankers Association, and others in the financial community.
Heitkamp has long been committed to making sure North Dakota’s community-oriented financial institutions are supported by practical regulations that encourage their success by:
- Bringing Top Small Financial Institution Leaders in North Dakota: In April, Heitkamp brought the head of the federal agency overseeing credit unions, National Credit Union Administration Board Chairman Debbie Matz, to North Dakota to hear directly from local credit union leaders about their concerns with potentially burdensome federal rules, and to learn more about the positive impact these smaller financial institutions have on communities and businesses across the state. In August 2013, Heitkamp brought Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg – who oversees community banks – to North Dakota to hear directly from bankers in the state about the importance of local and community banks to helping small businesses and communities thrive.
- Introducing Bipartisan, Commonsense Solutions for Support Small Banks & Consumers: This spring, Heitkamp helped reintroduce the bipartisan CLEAR (Clear Lending Enhancement and Regulatory) Relief Act, which would strip away outdated or superfluous regulations currently blocking credit unions and small banks from helping communities and small businesses grow. In February she introduced her bipartisan Privacy Notification Act to eliminate redundant, costly, and often ignored annual privacy notifications, and instead require financial institutions to alert customers only when privacy and information-sharing changes actually occur – a needed change that would better serve customers and avoid an unnecessary burden on community banks and credit unions.
- Fighting for Effective and Efficient Federal Rules: At a Senate Committee on Banking, Housing and Urban Affairs hearing last September, Heitkamp – a subcommittee ranking member – spoke about the importance of making sure the Dodd-Frank Wall Street reform law doesn’t hurt small institutions like credit unions and community banks. In March, Heitkamp introduced her bipartisan #CutRedTape Initiative. Together with Senator James Lankford (R-OK), who chairs the U.S. Senate Committee on Homeland Security & Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management – which Heitkamp helps lead – they are gathering stories from American families and small businesses across the country to help determine how the federal government can be more efficient and effective.