By Thomas G. Wolfe, J.D.
The Independent Community Bankers of America (ICBA) has urged President Trump’s Administration to “rein in the overzealous application of fair lending laws.” In a Jan. 27, 2017, release, Camden Fine, ICBA President and CEO, remarked, “Community banks are fully committed to fair lending and strongly oppose discrimination prohibited under laws such as the Fair Housing Act and Equal Credit Opportunity Act. However, community banks are experiencing enforcement overreach that diverts an abundance of resources from serving their local communities to complying with and responding to unwarranted fair lending allegations.”
KleinBank example. As an example of “unwarranted enforcement actions,” the ICBA points to the Justice Department’s “misguided and baseless claim” against KleinBank. According to the ICBA, even though KleinBank, a 110-year-old financial institution, had never been cited for any fair lending violations by the Federal Deposit Insurance Corporation, the Justice Department “penalized” the bank “for not marketing to or having branch offices in nearby Minneapolis or St. Paul, unilaterally determining that KleinBank should broaden its market presence to these distinct communities.”
The ICBA asserts that the KleinBank example and other similar enforcement actions “directly attack the community banking model.” Moreover, requiring community banks to “expand their market presence into neighboring counties” would force these banks to “alter their model and sound business practices,” the ICBA maintains. Accordingly, the ICBA states that it looks forward to working with the Trump Administration on these issues.
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