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Oregon bankers back cleanup to bank capital and public‑fund statutes, bill would allow more state bond holdings
Summary
Bankers said House Bill 2,971 would align statutory net‑worth language with regulator metrics (tier 1 capital), remove a 20% ceiling on certain investments and clarify public‑fund eligibility for banks using the Community Bank Leverage Ratio; proponents said changes are targeted at community banks.
House Bill 2,971, sponsored by Representative Gomberg, redefines “net worth” for statutes governing depositories of public funds and modifies allowable investments for certain financial institutions.
Kevin Christiansen, government affairs director for the Oregon Bankers Association, told the Senate committee the bill is intended as a cleanup and synchronization of statute with current regulatory practice. He said section 1 replaces a shareholder equity metric with “tier 1 capital,” the regulatory metric banks already use to measure capital, and removes a 20% ceiling that limited certain holdings of other states’ or public bodies’ obligations. Christiansen said those changes would allow broader, geographically diverse holdings and reduce concentration risk.
Christiansen and testifying bank CEOs emphasized the bill’s focus on Oregon community banks. Ron Green, president and CEO of Oregon Pacific Bank, said diversification “strengthens our risk profile” and helps protect local depositors. Christiansen also explained concerns about the Community Bank Leverage Ratio (CBLR): federal regulators created the CBLR to simplify capital calculations for smaller banks, and the dash‑1 amendment clarifies that banks using the CBLR can continue to accept public funds under state law so that participation in CBLR does not inadvertently disqualify them.
Committee members asked whether diversification increases risk; testimony from bankers explained diversification reduces concentration risk and that regulators continue to examine banks regularly. The committee closed public testimony; no objections from regulators (DCBS/DFR and Treasury) were reported in the transcript.
