Bill Posey: Stop overregulation of community banks to spur local investment, economic recovery


Dec 21, 2011

The federal government is simply out-of-touch with communities in our district. In such serious economic times, when small businesses are going under and homeowners are losing their homes to foreclosure, the federal government actually is making it harder for people to secure loans. That is why I introduced, earlier this year and with bipartisan support, H.R. 1723, which puts restraints on how federal bank examiners for the federal government regulate our small local banks.

For those unfamiliar with the matter, recently federal bank examiners have engaged in arbitrary decisions about which community bank loans are good and which loans are bad. This includes modified loans for which borrowers have never missed a payment — never even been one second late. This action has made our local community banks less willing to loan to small businesses and families. Regulations have created a fear in our community banks because many were slapped with penalties for providing loans to local businesses with the willingness and ability to repay loans. Our community banks are the lifeblood to our local economy and these excessively arbitrary regulations are killing our local economies.

As a local small-business owner for more than 30 years, I understand the vital importance of letting small businesses access loans and investment capital. These not only create jobs but also expand businesses that get our economy moving again. My legislation, also called the Common Sense Economic Recovery Act, would put power back into our community banks and spur our economy.

Likewise, many beach side hotels and ocean side condominiums line our beautiful beaches. Often the owners of this real estate have relied on community banks for investments and loans. As the economic recession takes a heavy toll on the Space and Treasure coasts, the last thing the federal government should do is to make it harder for local real estate owners and community banks to work together to drive our local economy. It is no small wonder why one of the largest hotel owners associations has endorsed my plan.

H.R. 1723 has created much-needed awareness of this issue among other legislators and it will certainly galvanize future support for similar legislation that was recently introduced. Already, I am working hard for passage of a new bill (H.R. 3461) which incorporates some of my ideas.

I support balanced oversight by federal agencies in the financial sectors of our economy. It was the failure of regulators to do their job that led to Bernard Madoff’s Ponzi scheme, not a lack of regulations. But we also must recognize that when regulators are being overbearing and arbitrary with small community banks, overregulation completely saps our entrepreneurial spirit.

posted to the TCPalm

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