U.S. Sen. Joe Donnelly (D-Ind.) is urging the U.S. House of Representatives to approve the Economic Growth, Regulatory Relief, and Consumer Protection Act that loosens regulations for community banks and credit unions. He met with various Indiana financial representatives Friday to tout rollbacks of banking laws that he co-authored.
In Indiana there are a 154 credit unions in the state and 103 community banks. The credit unions alone represent more than 2 million members. Banking executives joining Donnelly on a press tour said they were thrilled by the proposal, which would ease restrictions on the types of loans they could offer or the customers they could offer those to.
“There are tremendous benefits for Main Street America; for those individuals – Middle Class America – who belong to credit unions,” says Indiana Credit Union League President John Mackenzie.
U.S. Chamber of Commerce Executive Vice President Tom Quaadman believes the bill would instigate small business investment in more areas.
“In America where 50 percent of all start-ups start in occur in 20 counties in the United States,” says Quaadman.
The bill would lift rules and regulations for community banks and credit unions, which Donnelly says Indiana has 35 percent fewer of versus a decade ago. It rolls back some of the regulations written in response to the 2008 lending crisis, in which banks made risky loans and created complicated financial instruments to drum up business and increase profits. That recession caused millions of Americans to lose their homes. Donnelly says he doesn’t think the bill puts more Hoosiers at risk.
“So what this actually does is maintains the safety and stability," Donnelly says. "The big banks had received no benefits out of this; this is who it was aimed at. And now we can create more loans for more American dreams to come true.”
Donnelly says the bill would reduce regulatory costs and increase flexibility for mortgage lending. The bill sits before the U.S House of Representatives awaiting passage.