Aumua and Small Business Committee Address Challenges with Small Bank Start-Ups
Washington, D.C. – Congresswoman Aumua Amata, The House Committee on Small Business Subcommittee on Economic Growth, Tax and Capital Access held a hearing on Thursday to examine the negative impact that the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) has had on small lenders since its enactment in 2010.
Aumua and Chairman Tom Rice during the HSBC hearing on Thursday
“At a time when American Samoa, the territory I represent, is desperately trying to establish a community bank, these regulations are figuratively choking the life out of any such possibility,” said Amata. “Can you please discuss how credit-risk works for community banks, and any other factors that may prevent the start-up of a community bank?” questioned Amata.
So far, Dodd-Frank has required nearly 400 new rules; and as of July 15, 2015, 247 rules have been implemented and 60 proposed. Statistically, this means that approximately 21 percent of the rules from the law are still outstanding. Additionally, Dodd-Frank is estimated to have created $24 billion in compliance costs and 61 million paperwork burden hours since its inception. These deficiencies and the uncertainty of future rules have created additional hurdles to the start-up of new lenders.
“The stifling of credit unions is another concern of mine. The arbitrary cap placed on the amount they can lend is causing adversity and I know that communities like American Samoa could certainly use their assistance,” continued Amata.
“The Bank of Hawaii cannot be considered a reliable source for our small businesses to turn to in difficult times, because they are hesitant to be in American Samoa in the first place,” stated Amata. “The only other option for our people is the ANZ Bank, who operates out of Australia. It is high time that Washington create the type of regulations and rules that will allow U.S. banks to serve those areas whose lending avenues are limited,” concluded Amata.
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