U.S. Representative Judy Biggert (R-IL-13) today joined House Financial Services Committee members and several members of Illinois' congressional delegation at Chicago's Dirksen Federal Courthouse for a field hearing entitled, "Regulatory Reform: Examining How New Regulations are Impacting Financial Institutions, Small Businesses and Consumers in Illinois. The hearing explored how new financial regulations are constraining small businesses' access to capital, making private sector growth and job creation more difficult than ever.
As Chairman of the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, Biggert led efforts to coordinate the hearing and invited witnesses from her suburban Chicago district including James Renn, President and CEO of Lisle Savings Bank, testifying on behalf of Illinois League of Financial Institutions, and John Schmitt, President and CEO of the Naperville Area Chamber of Commerce. Also testifying was James Roolf, President of First Midwest Bank's Joliet Banking Center and Chairman of the Illinois Bankers Association (IBA).
"Illinois is home to some of the finest financial institutions in the country," said Biggert. "But lenders, small and large, are paralyzed by hundreds of unattainable and inconsistent financial regulations included in the far-reaching Dodd-Frank Act. And unfortunately, our job creators' access to capital has become the casualty as bankers are left scrambling to figure out how to actually lend money under the new rules."
"I hope that common sense will prevail and that our pervasive concern with compliance and "what will the regulators think' will become secondary to providing the best possible customer service, product development and growth strategies," said Renn, who runs a small mutual savings bank founded in 1917. "Right now though the threats to the future of a bank our size and certainly even smaller institutions are very real."
"Loans to small businesses didn't cause our economic meltdown, but it seems as if our natural reaction to the financial collapse and past abuses, may be hampering our ability to recover by making it too difficult for small businesses to obtain credit," said Schmitt, who explained that since January 2008, 300 Naperville Area Chamber business members have gone out of business.
"Our economic recovery is dependent on credit-worthy Americans getting the capital they need to expand their businesses and buy homes again," said Financial Services Committee Member Rep. Don Manzullo (R-IL-16). "Unfortunately, that will not happen until the bank regulators start easing the grip their examiners have on the banking industry."
"Current regulatory pressures are forcing many banks and savings institutions --particularly smaller ones -- to make difficult choices, including whether or not to get out of certain business lines, or simply cut their losses and merge or sell their banks," said Roolf, who stressed the impact of increased compliance costs on customers, shareholders, and local communities. "This means that Illinois inevitably will have fewer local banks, ultimately resulting in less competition and fewer choices for consumers."