ABA Banking Journal
ABA backs legislation to spur new bank creation
NEWSBYTES
A proposed bill seeks to spur new bank creation by easing federal capital requirements during their first few years of existence. The Promoting Access to Capital in Underbanked Communities Act, S. 3937, would encourage the formation of de novo banks by instituting a three-year phase-in period during which newly chartered banks would be given time to meet less stringent capital requirements as they adapt to a business model that aligns with the needs and circumstances of the communities they serve, according to bill sponsor Sen. Cindy Hyde-Smith (R-Miss.)
“We applaud Sen. Hyde-Smith for introducing this important legislation to promote new bank formation in rural and underserved areas,” American Bankers Association President and CEO Rob Nichols said. “This commonsense, pro-growth solution would expand banking access for individuals and small- and medium-sized businesses across the country, which is a big win for bank customers and their communities.”
A companion measure, H.R.758, was introduced last year by Rep. Andy Barr (R-Ky.) and was also endorsed by ABA.