Cao Cautions Geithner to Avoid Over-Regulation of Community Banks

Press Release

Today, Congressman Anh "Joseph" Cao (LA-02) advised Treasury Secretary Tim Geithner to show special consideration for community banks when drafting new banking regulations authorized under the financial regulatory reform legislation recently passed by Congress and signed by President Obama.

Cao said, "Community banks must be protected from over-regulation under the new law. These banks are especially suited to serve the needs of small businesses in the communities where they do business, and small business is the life blood of our economy."

Cao, who met with Geithner today on Capitol Hill, was among 237 House members who voted June 30th in favor of the financial regulatory reform bill, which contains consumer safeguards against overzealous lending and risky trading as well as other reforms including procedures for liquidating firms in trouble at minimal cost to taxpayers.

Cao pointed out the reforms are directed mainly toward the nation's large bank corporations that have come to be known as "too big to fail." Cao said, "the community banks had little to do with the sorts of abuses so prevalent among the large bank corporations which cost many people much of their life savings and gave rise to the need for reform. It's important that the community banks remain unencumbered by excessive regulation, so they can continue to serve the needs of small businesses in their communities."

Geithner told Cao the Treasury Department will keep the special needs of community banks in mind when drafting the new regulations.

The Senate passed the Restoring American Financial Stability Act of 2010 (H.R. 4173) on July 15th. President Obama signed the bill into law last Wednesday. At the signing ceremony, the President expressed his appreciation to Senate and House Republicans who crossed party lines to vote in favor of the bill. Looking across the room and pointing at Cao, he said with a broad smile, "Good to see you, Joe!"

Source