Rep. French Hill (R-Ark.) introduced his plan to support community banks on Nov. 14 amid speculation he is seeking the top Republican position on the House Financial Services Committee.
Hill’s plan was introduced as current Chair Patrick McHenry (R-N.C.) prepares to retire from Congress at the end of this year. Hill faces multiple competitors for the role, including Reps. Andy Barr (R-Ky.) and Bill Huizenga (R-Mich.). The competition for Financial Services chair comes after Republicans maintained control of the House in the Nov. 5 general election, securing 218 seats to the Democrats’ 209.
Hill said federal regulators should be banned from ordering institutions to terminate an account without reason. He also supports making climate stress testing optional for financial institutions and banning their use in connection with setting prudential capital requirements.
“Instead of creating separate and unique climate-specific regulatory mandates, climate should be considered within existing frameworks such as credit and operational risk assessments, which prevents the need for overlapping and prescriptive regulatory measures,” Hill added.
Hill said regulatory and supervisory tailoring for community banks should be reestablished based on their risk profile, complexity, business model, financial activities and size. Hill advocated for a new process for banks to appeal supervisory determinations, similar to the Fair Audits and Inspections for Regulators’ Exams Act, a bill which would establish an appeals process between regulators and banks by hiring an independent director to review appeals.
Hill called on Congress to investigate whether regulators have engaged in unlawful political targeting to go after industries such as digital assets and firearms under the administration of President Joe Biden. He also supported providing “clear supervisory expectations to financial institutions about their third-party relationships including with financial technology companies. This requires the agencies to be equipped with the necessary technical skills and expertise in order to understand and work with their supervised entities.”
Hill, the founder and former chair and CEO of Little Rock-based Delta Trust & Banking Corp., has proposed placing the Consumer Financial Protection Bureau under congressional appropriations and replacing the director with a bipartisan commission.
Other changes Hill called for included:
- Raising and indexing for inflation the $10 billion threshold for financial institutions to be subject to CFPB supervisory authority.
- Having the community bank representative on the Federal Reserve Board of Governors play a more active role in supervising and regulating community banks, and work with interagency coordinating bodies such as the Federal Financial Institutions Examination Council.