engaged, but it is quite another thing when our customers become engaged. A great example of this was last year when an early draft of the Inflation Reduction Act included a provision requiring banks to report all account inflows and outflows over a certain level to the IRS. Our customers, including the press, rallied to call out this bad piece of proposed legislation. Customers flooded their federal lawmakers with calls and emails, protesting the provision. Others wrote op-eds in their local newspapers. Seemingly overnight, this provision disappeared from the Act that was ultimately adopted. Our customers, whether they are small business owners, farmers or individuals, have by far the most powerful vote when it comes to real issues that may have a direct or indirect impact upon their lives or businesses. Senator Moran said it best at the KBA CEO Summit in Colorado Springs this summer: “I’m not here because of the banks. Rather, I’m here because, like you, I want to do what is best for the businesses, farmers and individuals in your communities.” As mentioned above, the number of significant issues facing our community banks today are numerous and, to some degree, overwhelming. On some of these issues, like the Access to Credit for Rural Economies (ACRE) Act, we are in a fortunate position to be playing offense, while on other issues (like the CFPB’s Small Business Reporting Section 1071 Rule), we are certainly playing defense. Of course, our very capable KBA team is willing and able to assist bankers in advocating every one of the issues. However, it is our job as bankers to help our customers know which issues need the most priority, as well as to inform and educate them based upon “real-life” experiences from our institutions. They do not have the advantage of dealing with financial policy issues in real-time as bankers do. For the purposes of this article, I’d like to highlight three key issues that will require a significant amount of time, thought and effort this coming year: 1. Section 1071 (Small Business Lending Reporting — aka “HMDA for Small Business Loans”): This legislation was part of the Dodd-Frank Act (DFA) passed in response to the Great Recession (2008-2009). The original provision in the DFA required banks to report 19 data fields for each small business and ag loan made when a customer’s annual revenue is under $5 million. Unfortunately, during the process of writing the final rule, the CFPB significantly expanded the scope of reporting to a very onerous 81 data fields. The final rule, as written, will have a significant chilling effect on small business and ag lending across the country. This will be a cumbersome burden not only for community banks but also for the small business customers they serve, resulting in less credit availability. A well-intended piece of legislation with the effort to discourage discrimination will result in hurting the businesses and individuals it was intended to help! I believe this is an issue we must get our customers involved with to help our regulators and legislators see the damage this final rule will create. Most of our customers have no idea Section 1071 even exists, let alone the final rule crafted by the regulators. The customers and farmers I have visited with about this rule have been significantly opposed and extremely upset that Congress and bank regulators would do such a thing. The KBA has crafted a one-page document to hand out to customers describing the basic facts regarding Section 1071, with instructions on how they can easily contact their legislators regarding the issue. I encourage every banker in Kansas to inform their customers about Section 1071 and provide them with the easy-to-use tools they need to take action. 2. ACRE Act: Thanks to the many years of dedicated and hard work of numerous bankers, legislators, KBA and ABA, we can finally see a potential finish line ahead for the ACRE Act recently reintroduced in both the U.S. Senate and the U.S. House. If enacted into law, farmers and ranchers will directly benefit from lower interest rates for their farm/ranch operations, and small communities across Kansas will benefit from lower interest rates for rural home purchases and new home construction. However, we haven’t reached the finish line yet. Every community banker in Kansas must be an advocate through active communication with their various local, state and national farm associations, including the Kansas Farm Bureau and the Kansas Grain Commodity Associations (Wheat, Corn, Soybeans and Sorghum), in addition to Kansas rural housing and economic development associations. We need local leaders (mayors, city councilmen, county commissioners, etc.) as well 8
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