Tester to Fed chief: Montana’s banks need consistency
Senator presses Fed Chairman as Wall Street Reform bill is signed into law
(WASHINGTON, D.C.) – As the President signed into law a tough new reform bill to crack down on Wall Street and end taxpayer-funded bailouts, Senator Jon Tester today delivered a message to one of the nation’s top financial regulators: Montana’s banks need consistency in the way regulations are enforced.
In a Senate Banking Committee hearing on Capitol Hill, Tester told Federal Reserve Chairman Ben Bernanke that he hears constant concerns from Montana’s community banks about uncertainty in the way banking regulations will be applied.
This has prevented banks from making certain loans because of lack of certainty in how federal regulators will view those loans.
“When I go to Montana every weekend, or when I come back here, I’m continually getting calls from community banks saying regulation isn’t consistent—between agencies or within agencies,” said Tester, a member of the Senate Banking Committee. “There’s got to be a way that you can get that information.”
Tester highlighted the need for predictability for community banks to be able to make appropriate loans and to address the credit crunch facing the nation’s economy.
Bernanke responded that he recognized the problem and outlined ways in which he is hoping to increase consistency and predictability for banks, including specific measures that the Federal Reserve has taken to educate examiners.
Tester also questioned Bernanke about the national deficit, and about the growth of America’s economy.
In written testimony, Bernanke reported that “economic activity expanded at a moderate pace in the first half of 2010,” adding that “activity was bolstered by ongoing stimulus from monetary and fiscal policies.”
Today’s hearing took place only minutes after President Obama signed the Wall Street reform bill into law.
The bipartisan law includes a specific provision by Tester to ensure that America’s smaller community banks only pay their fair share for federal deposit insurance. All but two banks in Montana are considered community banks.
The law also includes language from Tester requiring the new Consumer Financial Protection Bureau to consider the impact of all rules on community banks and credit unions, and the rural customers they serve, before any rules are made.
“Our economy almost collapsed two years ago because of people who trusted Wall Street to play by the rules without any oversight,” Tester said. “Now we’ve put the cops back on the beat and cracked down on big banks’ risky behavior. And as the only Senate Democrat to vote against both bailouts of Wall Street and the U.S. auto industry, I’m proud to say this new law finally ends the days of ‘too-big-to-fail’ and taxpayer funded bailouts.”
Video of Tester’s exchange with Bernanke is available HERE.