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WASHINGTON, D.C. – U.S. Senator Jerry Moran (R-Kan.), a member of the Senate Banking Committee, today introduced legislation to help ensure a vibrant future for America’s community banks. The Communities First Act, S. 1600, would provide much needed regulatory and tax relief to community banks and their customers. By stripping away outdated or unnecessary regulation, Sen. Moran’s bill would help community banks focus on what they do best: providing loans to their communities and helping to create jobs. 

With 14 million Americans looking for work, our government’s first priority should be to create an environment where businesses can grow and hire workers,” Sen. Moran said. “I continue to hear concerns from Kansas bankers who are hesitant to lend as they wait for the next burdensome regulation to come out of Washington. Until banks are willing and able to make prudent loans to hometown customers, job creation will remain stifled and our economic recovery will continue to lag.”

Community banks play a critical role in our nation’s economic recovery, serving rural, small town and suburban customers alike. Unfortunately, the regulatory, tax and paperwork requirements stemming from the passage of the Dodd-Frank Act and other legislation impose a disproportionate burden on these banks because they do not have the resources of larger financial institutions and the ability to effectively manage their legal and compliance costs. The expense of over-regulation diminishes the ability of community banks to attract capital and support the credit needs of their customers and local businesses.

“While community banks like mine continue to lend to small businesses, which employ thousands of local residents, we are being unduly burdened by harsh regulations that stifle economic growth,” said Roger Brown, president of Citizens State Bank in Cheney, Kansas, and chairman of the Community Bankers Association of Kansas. “I thank Sen. Moran for his leadership in introducing this vital legislation. The Communities First Act will allow community banks in Kansas and across the country to continue to lend to small businesses, which will help create jobs and bolster the economic recovery.”

The Communities First Act includes 25 provisions, including provisions that would:

  • Bring accountability to the Consumer Financial Protection Bureau;
  • Enhance rural lending programs in communities with a population of 2,500 or less. The bill would exclude any income earned on agricultural real estate loans and mortgage loans from the taxable income of community financial institutions in small communities;
  • Extend the 5-year net operating loss (NOL) carry-back provision through 2011 for community banks with $15 billion or less in assets. This will help community banks redirect their capital back into their communities; and
  • Exempt financial institutions with assets of less than $1 billion from certain requirements of Sarbanes-Oxley.

Sen. Moran is a member of Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protection. He is committed to shedding light on the challenges facing community banks in the current regulatory environment, and providing these financial institutions with relief. Cosponsors of the bill include U.S. Senators Roy Blunt (R-Mo.) and John Barrasso (R-Wy.). The House companion bill to the Communities First Act, H.R. 1697, has been introduced by U.S. Representative Blaine Luetkemeyer (R-Mo.).