Since November’s election, many bankers have anticipated that the administration of President Donald Trump would roll back regulations they felt unfairly limited their institutions.
For some, that optimism dwindled as the new administration struggled to pass other promised reforms. While the regulatory burden probably will not grow heavier in the next four years, some observers reason, the chances of a rollback seem slim.
Centric Bank CEO Patti Husic disagrees – especially after discussing the issue in person with officials from the U.S. Treasury Department.
Husic was among 16 bankers who met with department officials last week to discuss regulatory reform. The attendees represented the American Bankers Association, of which Husic is a board member, and Independent Community Bankers of America and came from institutions of varying sizes from around the country.
U.S. Treasury Secretary Steve Mnuchin was present for a small portion of the discussion, which ran slightly longer than the four hours allotted, Husic said.
The event was a follow-up to the executive action Trump issued in February ordering the Treasury to weigh changes to the Obama-era Dodd-Frank Act. Community bankers in particular have criticized the tome of legislation, saying the regulatory burden it imposed has hampered their ability to lend but did little to curb practices that triggered the 2008 recession.
Husic specifically discussed the hurdles banks face when they lend to small- and medium-sized businesses, the bread and butter of community institutions like Centric. The economy, she argued, can only thrive when these businesses thrive, but banks and business owners are often overwhelmed by the extensive paperwork required to complete a loan.
Husic also emphasized the importance of the Small Business Administration’s 7(a) loan program, which lets banks take on certain loans that might otherwise prove too risky. Trump recently proposed reducing the SBA’s budget by 5 percent, although the cuts did not relate directly to the 7(a) program.
Other topics at the meeting included discrepancies between regulator-recommended “best practices” and actual regulatory requirements, hurdles in raising capital and difficulties in mortgage lending.
After the meeting, Husic said she does not count herself among the bankers holding out little hope for regulatory rollback.
“It was an extremely optimistic and positive meeting. You could tell there were receptive ears on what information we had to talk about,” she said.