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Members press reforms to de novo bank formation and capital thresholds to revive local lending
Summary
Witnesses and members said high initial capital requirements and rigid thresholds discourage new community bank formation; several lawmakers and the ICBA called for phased capital compliance and tailoring of rules to local business models.
Several members and witnesses urged statutory and regulatory fixes to encourage de novo bank formation and ease capital burdens that, they say, deter new entrants into community banking.
Rep. Andy Barr (Chairman, Subcommittee on Financial Institutions) told the committee he reintroduced the Promoting New Bank Formation Act (referred to in testimony as HR 4 78) to establish a more flexible approach for new charters and reduce initial capital burdens; he said…
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