Despite Financial Meltdown, Rep. Posey Fights for Less Regulation of Banks

Despite the total global financial meltdown caused by lack of oversight of banks and the resulting U.S. taxpayer bailout of U.S. and foreign banks, Rep. Bill Posey (R-FL) is fighting for less oversight of banks which he calls a "jobs killer." 

Rep. Posey issued the following press release:

Washington, Jul 8 - The House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit held a hearing today to consider legislative proposals to address the arbitrary and job-killing bank examination practices of federal bank regulators as applied to local community banks.

Central to the hearing was Congressman Bill Posey’s legislation to halt the recent trend of regulators arbitrarily requiring banks to classify good loans as bad loans resulting severe financial penalties for local banks. A serious consequence of this overreaction by federal regulators is fewer loans to small businesses and families across every community.

“It was clear from today’s hearing that the bank regulators are out of touch with what’s happening on Main Street and how these federal bank examiners are killing job creation across the nation,” said Posey “There is a total disconnect between what business leaders and community banks are experiencing across America and what Washington regulators say is actually happening. Bottom line is small businesses and entrepreneurs need reliable access to capital in order to expand and create jobs.”

The Common Sense Economic Recovery Act (H.R. 1723) would stop regulators from assigning performing loans to non-accrual status. This impairs the bank’s financial health, chokes their ability to lend and can lead them to foreclose on borrowers. The legislation would let banks treat a loan as a performing loan if it is 1) current, 2) no more than 30 days delinquent in last 6 months, 3) an amortizing loan, and 4) not funded through an interest reserve account. The bill also directs regulators to report to Congress ways to prevent contradictory guidance from the financial regulators. The bill would sunset two years after enactment. Posey’s bill currently has 41 cosponsors. 


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