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New Law Will Help Banks Serve Communities

For those who feared that partisanship and politics always trumps policy in Washington, I have good news!

Thanks to the power of grassroots advocacy and the support of pro-community bank elected officials, including every member of our West Virginia Congressional delegation (Sens. Capito and Manchin; Reps. McKinley, Mooney, and Jenkins), Washington has approved much-needed financial reforms.

The landmark Economic Growth, Regulatory Relief and Consumer Protection Act provides regulatory relief to our nation’s community banks, so they can continue financing the dreams of Americans in local communities like ours. For far too long community banks like Union Bank have been hampered by the ever-increasing federal regulations that raised compliance costs, reduced local credit availability, and played an important role in the decline of new bank formation and consolidation within our industry, increasing systemic risk while reducing consumer choice.

This hard-fought law will help community banks, and thus help local communities, by allowing community banks to spend less time and resources dealing with regulation, and more time and resources on serving our customers and communities.

Just one example, in regard to home mortgage lending: Community banks will again be able to offer flexible lending solutions tailored to a borrower’s individual circumstances, rather than a legislatively-defined “one size fits all” type product.

To advocate these helpful reforms — which will align federal regulations with community banks’ smaller size, lower risk and relationship-based business model — community bankers from across the nation banded together, with the support of our customers and allies, to make our voices heard. Through letter-writing campaigns, petitions to Congress, media outreach and visits with elected officials — both locally and in our nation’s capital — I and many other West Virginia community bankers shared our story about how meaningful reform furthers our mission to serve as a source of credit for customers, support local jobs and help fuel our local economy.

By igniting the economic power of community banks, lawmakers are signaling a sea change that encourages greater access to financial services that puts customers first while contributing to our nation’s financial recovery.

And while there’s still more we must do to right-size financial regulation, this new law is a step in the right direction. Finally, our staff at the bank can get back to relationship banking and focus on the needs of our customers rather than the mounds of regulatory paperwork meant to rein in Wall Street’s excesses.

To those concerned that our political environment was too far gone to keep good public policy from becoming law, let this serve as a reminder of the role we all play in advocating for change. You can’t keep a good idea, or a determined community banker, down.

Tim Aiken is president and CEO of Union Bank Inc. based in Middlebourne. He serves as vice chairman of the Safety and Soundness Sub-Committee of the Independent Community Bankers of America (ICBA), and serves as West Virginia’s elected representative to the ICBA’s Federal Delegate Board. He is a board member of the Community Bankers of West Virginia.

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