Independent Banker - February 2023 - 43

PORTFOLIO CHECKS & BALANCES
Shaping the regulatory year ahead
By Lilly Thomas, ICBA
even the smallest banks. A community
bank exception is needed.
Community Reinvestment Act
(CRA) modernization
W
e're already in the second month of 2023, and ICBA is deep into
regulatory advocacy.
With a full agenda of topics that need attention, ICBA's government relations
team is meeting with the regulatory agencies, writing comment letters and
offering up research and ideas to help shape the discussion. The goal is to
ensure that the strength and vitality of community banks is a key consideration
in regulatory decisions and outcomes.
Here's a rundown of the key issues ICBA is advocating on.
Climate risk
ICBA is engaging on climate risk with
all the regulatory agencies, asking
them to reconsider their climate risk
proposals and their adverse effects
on local communities. ICBA strongly
opposes climate risk regulation
of community banks and has told
policymakers, including those at the
FDIC, OCC and SEC, that any trickledown
effect of large bank regulation
in this area will stifle innovation and
create barriers to serving consumers
and small businesses. ICBA will also
continue to push back against New
York State Department of Financial
Services' proposed guidance on
climate risk, which contains sweeping
expectations about how New York
state-regulated banks should monitor
and control their material climaterelated
financial risks.
1071 implementation
The Consumer Financial Protection
Bureau (CFPB) is expected to release
its final rule on implementing Section
1071 of the Dodd-Frank Act, which
includes data collection and reporting
requirements for small-business
lending. ICBA opposes the current
proposal-covering community banks
that originate 25 loans or more-which
would create an unnecessary burden on
The federal banking agencies have
suggested their final rule modernizing
CRA will be released early this year.
ICBA is reiterating the need for higher
thresholds that minimize new data
collection and reporting burdens for
community banks. Last August, ICBA
sent the agencies a 27-page comment
letter describing the challenges and
opportunities CRA modernization
presents to community banks and
the communities they serve-and
how to make CRA less burdensome
for community banks while doing
more to help lower- and moderateincome
communities.
Digital assets & cryptocurrency
ICBA will continue to ensure community
banks have a voice in the future of digital
assets and cryptocurrency. As shared
in letters to the Treasury, the Financial
Stability Board and others in 2022, ICBA
supports efforts by policymakers to
resolve regulatory and legal debates
about the classification of digital
assets as securities, commodities or
banking products.
In addition, ICBA is calling attention
to threats to privacy, consumer
protections and financial stability.
The potential for money laundering,
terrorist financing and fraud with these
assets is high. They also threaten to
disintermediate community banks
and undermine their ability to provide
funding to support local economic
activity, growth and development.
Cryptocurrency companies do not meet
42 // ICBA Independent Banker // February 2023
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Independent Banker - February 2023

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