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ICBA says Congress, regulators should give community banks capital requirement relief

Capital requirements are burdensome to community banks and Congressand regulators should help provide a way for smaller banks to raise capital, IndependentCommunity Bankers of America senior executives said.

By the ICBA's calculations, the number of regulations on communitybanks has increased by 40% since around 2010, President and CEO Camden Fine saidat an April 26 press conference. Most of the rules are related to consumer regulations,he added.

Recent capital requirements make it "in some cases, moredifficult for community banks to raise capital," he said.

Paul Merski, executive vice president for congressional relationsand chief economist for the ICBA, said that while regulators want banks to holdmore capital, it is not easy for the community banks to raise it. Non-SIFI banksshould not be held to Basel III capital requirements, he said.

"If the regulators are saying you need higher capital levelsand the Congress is saying you need higher capital levels, they should open up therules and regulations to allow them to attract and raise capital," he said.

He added that he would prefer regulators give better guidanceinstead of passing Congressional legislation because the bank agencies already havethe authority to do so.

Community bankers attending the ICBA's Washington Policy Summitthis week are lobbying for Congress to provide easier access to capital markets,decrease reporting requirements under the Home Mortgage Disclosure Act, and requireexaminations of the Consumer Financial Protection Bureau. Other issues the associationis lobbying for include repealing credit unions' tax-exempt status; opposing cutsor changes to crop insurance programs; and supporting the Data Security Act, whichwould require all payment participants be subject to data security standards.