30 SEPTEMBER / OCTOBER 2023 GR SUMMIT The banking industry finds itself navigating a dynamic and everchanging legislative and regulatory landscape influenced by a variety of federal policy initiatives. While several of these initiatives garner support within the industry, others encounter opposition, leading to concerns about their potential ramifications on banks, consumers and the overall economy. Striving for a balanced approach, the industry grapples with crucial issues this year amid the constantly evolving federal policy landscape. While the industry supports many federal policy initiatives, there are some proposals it opposes. One such proposal is the Credit Card Competition Act, a continuation of the Durbin Amendment from DoddFrank in 2010. Advocates of the Act aim to impose government mandates on credit cards, potentially limiting banks’ ability to choose secure and reliable networks. The Act could also force banks to accept all types of transactions requested by merchants, leading to frequent card re-issuance and disproportionately burdening community banks. It is essential to encourage a more balanced approach that takes into account the interests of both consumers and banks. Another concerning development is the Consumer Financial Protection Bureau’s Small Business Loan Application Data Collection Rule, which imposes rigid data requirements that will adversely affect small businesses by limiting credit access and compromising their privacy. This rule should not be applied to community banks. Given that community banks excel in personalized, relationship-based banking, this rule’s standardization of loan terms may not be suitable for small business borrowers. It is vital to consider exemptions for community banks and evaluate Federal Legislative Landscape Dax Denton Chief Policy Officer Indiana Bankers Association DDenton@indiana.bank Ross Teare Vice President - Government Relations Indiana Bankers Association RTeare@indiana.bank alternative solutions, such as House Joint Resolution 66, proposed by Reps. Andy Barr, R-Ky., and Andy Ogles, R-Tenn., to ensure better service for all small businesses. Federal regulators have been working on incorporating climate-related risk assessments into the banking industry, responding to the growing concerns about climate change’s potential impact on the financial sector. The Federal Reserve and other agencies are evaluating how climate-related risks might affect financial stability and considering measures to improve climate risk disclosures and stress testing methodologies. Prudential regulations should focus on banks’ actual risks and promote standardized definitions and principles for disclosing material risks. Regarding business discretion, banks should retain the ability to decide with whom they conduct business as long as it aligns with the law. If policymakers seek to further regulate industries like fossil fuels, they should do so directly through appropriate legislative and regulatory actions rather than indirectly through financial intermediaries like banks. Prudential regulations should center on actual risks faced by banks and encourage the development of standardized definitions and principles for disclosing material risks. Scenario analysis methodologies should assess physical and transitional risks impacting banks, leading to necessary and reasonable disclosures without overburdening banks with unnecessary data collection. The banking industry is witnessing a surge of interest in digital assets and cryptocurrencies. Consumers are increasingly seeking to access these markets through trusted intermediaries like banks. However, the rapid growth and fluctuations in the digital asset marketplace, including cryptocurrencies and stablecoins, have raised
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