By Don Thomason
U.S. Rep. Tom Cotton, R-District 4, told members of the Arkansas Bankers Association on Friday that he believes there is an opportunity for bipartisan compromise in Congress to provide some regulatory relief for community financial institutions.
Cotton was the keynote speaker at the Arkansas Bankers Association luncheon at the Embassy Suites Hot Springs -- Hotel & Spa.
"Can I say the president is supportive of community banks? No, I can't say that definitively. Can I say he's hostile to them? I'm not sure I can say that definitively, either. I can say that, in my opinion, he seems to be indifferent to the damage he's causing to the community banking system through Dodd-Frank (Wall Street Reform and Consumer Protection Act) and the actions of the CFTC (U.S. Commodity Futures Trading Commission)," he said.
The Dodd-Frank Act, enacted in 2010, is legislation that increased government oversight of trading in complex financial instruments and restricts the types of proprietary trading activities that financial institutions will be allowed to practice. It was passed with the intent of preventing the collapse of major financial institutions.
The bill followed the 2008 near-collapse of the U.S. economy, fueled by the crash of the housing market.
"There is some alignment of interest on the Senate Banking and the House Financial Services committees. There is some interest in getting some measure of regulatory relief for our smaller institutions," Cotton said.
He said Ben Bernanke, chairman of the Federal Reserve, has said that the sweep of Dodd-Frank and the scope of some of the regulations already issued are "probably too broad and are hurting economic growth across the country."
"And this is where the president's interest becomes alarming. I don't think he wants to slow the economy. I think he wants an economy that is growing faster, not only because it's directly related to his approval rating and therefore his political standing and his ability to accomplish other legislative priorities, but also because it increases the tax base and generates more tax revenue to pay for his spending programs," Cotton said.
"So I do think there is an opportunity for some alignment here to actually get some regulatory relief for community banks. That is important because the law and regulations are hurting the people they were designed to help," he said.