ABA Warns President Biden on How Regulatory Initiatives Will Harm Banks

Posted December 21, 2023

Leaders at the American Bankers Association (ABA) are urging President Biden to take action against the large number of regulatory initiatives under consideration by banking regulators.

ABA president and CEO Rob Nichols wrote a letter to Biden where he said the initiatives would cause a chilling effect on the U.S. economy, adding further pressure on credit as well as higher prices for banking services.

Incentives under consideration include a rewrite of the Community Reinvestment Act, transaction routing and business-to-business payment caps, rulemaking on small business lending data reporting, changes to the Federal Home Loan Bank system and revisions made to bank custody businesses.

“We recognize that a strong banking sector needs a clear set of rules, but compliance can be expensive,” Nichols said. “As a result, banks are understandably seeking scale to overcome the economic costs imposed by Washington no matter how well intended. This reality makes it all the more important to make sure any new rules will do more good than harm.”

In his letter, Nichols asks Biden to appoint Treasury Secretary Janet Yellen to conduct an analysis on how the incentives, if passed, would affect the cost of bank services such as deposits, loans, basic payment programs and implementing cybersecurity and other critical systems.