By Representative Lynn Westmoreland
On Wednesday, the House Financial Services Committee held a hearing on H.R. 3461, a bill to improve the examination of depository institutions, and featured testimony from representatives from the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, and the National Credit Union Administration, as well as testimony from several bank executives.
I've sat in many of these hearings and listened to these Washington regulators claim they are working to resolve their problems or just had them pass the buck over and over again. Not surprisingly, they took the opportunity to do it once again at this hearing. Members of the committee were told this bipartisan legislation could not be supported by the regulators present because it would mess up their regulations that are already in place. And we wouldn't want to do that, right? I mean those regulations in place have been so successful.
I don't think so.
Every week we see new banks failures across the country, and it's rarely the larger banks who created much of the financial mess of 2008. Instead, it's the small, community banks that pay the price. Community banks are the economic engine of many small towns, driving growth with investments in small businesses or home loans. When community banks fail, we see that economic growth dry up. That's why you see a much higher unemployment rate in the states with the highest bank failure rates.
In Georgia, we lead the nation with 75 bank failures since the problems started in 2008. That's not really a statistic where you want to come in at number one. I'm not sure how the FDIC would define the term "success,' but I think even a child can see that this isn't anywhere close to it.
Whether they like it or not, these regulators are going to have to accept that the old way of doing things just doesn't work anymore. If it did, we wouldn't still see the same problems we are seeing today.
When I talk to my bankers back home in Georgia, they tell me one of the biggest issues they are facing is the inconsistency of what they are being told and what the regulators on the ground are actually doing. That's why a bipartisan group of members of the Financial Services Committee drafted H.R. 3461: to stop the inconsistencies between what's being said in Washington and what's actually happening on the ground. These regulators can tell me the inconsistencies don't exist, but I believe my constituents because the evidence is on their side and because I've never met a bureaucrat who wasn't fluent in double talk.
In fact, I don't know about you, but I've about had it up to here with Washington double talk. And I am sick and tired of these bureaucrats fighting members of the Financial Services Committee tooth and nail for trying to help save our community banks. So, in order to avoid any mixed messages on my part, let me be clear. These Washington regulators either need to help us save these banks or get out of our way.