CHARLESTON, W.Va. -- Too many regulations are hurting community banks in West Virginia, representatives from the industry told lawmakers Monday.
Rep. Shelley Moore Capito, R-W.Va., chaired a subcommittee field hearing on the impact of regulations on jobs at the Robert C. Byrd U.S. Courthouse Monday morning. Sen. Joe Manchin, D-W.Va., and Ohio representative John Renacci also took part in the hearing.
Congress passed the Dodd-Frank Act in 2010. Aimed at preventing another financial crisis like the one in 2008, the law brought about 400 new regulations on the private sector.
Banking professionals who testified Monday said the new regulations put too much of a burden on small banking institutions and businesses.
Bill Loving, president and CEO of Pendleton Community Bank in Franklin, told the subcommittee that community banks should be shielded from the new regulations since they did not cause the financial crisis. Complying with the new regulations has been particularly difficult for small banks, which don't have large in-house compliance teams, he said.
"Every dollar spent on compliance is a dollar less than we have to lend and invest in the communities we serve," Loving said in his written testimony. "Every hour I spend on compliance is an hour I could be spending with customers and potential customers, acquiring new deposits and making new loans."
Tom Brewer, president and CEO of Peoples Federal Credit Union, testified that increased regulation is one of the most significant changes he's seen over 27 years in the credit union industry. Peoples Federal has 29 full-time employees and one of them is completely devoted to compliance with the regulations, he said.
"With a relatively small staff, having someone devoted full-time to compliance is a considerable financial burden and was unheard of only a few years ago," Brewer said in his written testimony. "It diverts resources from direct member service, such as from the teller line or from the loan department or from financial counseling. With budgets already very tight, this added expense impacts what we can pay members on their savings and what they have to pay on their loans."