The Independent Community Bankers of America expressed support on Friday for the Municipal Advisor Relief Act, which could reduce the regulatory burden for community banks through a registration exemption.
Under proposed regulations, community banks and their employees are required to register as municipal advisors, which were established in the Dodd-Frank Act as a new class of regulated entity that provides financial advice to local and state governments.
In February, Reps. Steve Stivers (R-Ohio) and Gwen Moore (D-Wis.) introduced the Municipal Advisor Oversight Improvement Act, which would protect participants who do not advise municipalities from facing overlapping and duplicative regulation through the clarification of the municipal advisor definition. The legislation is identical to that passed last year in the House but that was not taken up in the Senate. “Community banks have always provided traditional banking services to the municipal governments of the communities they serve under close supervision by state and federal banking regulators,” ICBA President and CEO Camden R. Fine said. “Municipal advisor registration and examination would pose a significant expense and regulatory burden for community banks without enhancing financial protections for municipal governments. Removing this unnecessary regulatory mandate will help community banks continue to contribute to growth and prosperity on Main Street.”