Pub. 4 2013 Issue 1

spring 2013 7 Too Important to Fail I am proud to join the Senate Commit- tee on Banking, Housing and Urban Affairs in the 113th Congress – proud because it gives me the opportunity to help our community banks better serve West Virginians so that our great state can create jobs and keep our economic recovery going. Community banks play a critical role in making local economies vibrant, not just in West Virginia but all across the country. A recent study by the Federal Deposit Insurance Corporation (FDIC) under- scores just how important they are. According to the FDIC, community banks hold the majority of banking de- posits in rural and small urban counties (with populations of less than 50,000) in the United States. Moreover, there are more than 600 counties in our country – almost one out of every five – that have no other physical banking offices except those operated by community banks. The best community banks put local financial resources to work on behalf of their communities. They are committed to the people, businesses and aspirations of their towns and villages. They know their customers and their customers know them, which combines to produce a key ingredient in the success of any business – customer loyalty. As of 2011, community banks made up 95% of all banking organizations. While community banks held only 14 percent of all banking industry assets na- tionwide, they provided a whopping 46 percent of the banking industry’s small loans to farms and small businesses. Small businesses are the economic engines of so many rural areas in this country. We must continue to ensure they have a reliable and safe access to capital, and our community banks need to be the source for that capital. Consequently, as we go forward, we need to make sure that our commu- nity banks are able to provide an even greater range of financial services and allow them to raise additional capital in responsible ways. That’s why one of the top priorities of my work on the Banking Committee will be to make sure com- munity banks are not treated the same as Wall Street banks when it comes to the new federal regulations. Let’s face the facts. Community banks played absolutely no part in the 2008 Crash. Simply put, they and large Wall Street banks are two completely differ- ent animals. And yet, many provisions of the Dodd- Frank legislative fix to the crash also apply to community banks as well as to the Wall Street banks. Perhaps more importantly, regulators are far too often treating community banks with the same scrutiny they apply to the large banks. And that’s hurting small banks and stifling the business lending that is the lifeblood of the local rural economy. So I will be looking for ways to ease Dodd-Frank and other banking regula- tions on community banks while at the same time preserving the regulations on Wall Street to prevent another financial disaster. Community banks need to be free from onerous regulations so they can lend effectively, and they need a level playing field in competing against Wall Street banks. We were lucky that in West Virginia our state lending rules were already strong before the 2008 Crash – one of the main reasons why the Crash did not affect our state’s housing market as much as it did most of the country. Another reason is the kind of good old common sense that keeps West Virgin- ians out of so many jams and, in this case, kept us from getting caught up in all the hype around the real estate bubble. Of course, the biggest financial problem facing our country today is our run- away budget deficit of nearly $1 trillion a year and our still rising national debt of $16.5 trillion. And while most of Washington expects the worst, I’m ever hopeful that we can strike a grand bargain that puts our financial house in order once and for all. I’m promoting solutions every day in the Senate. In the meantime, though, I will do everything in my power as a member of the Senate Banking Committee to make sure our economy keeps growing and that our community banks are helping to fuel that growth. The Wall Street banks claimed they were “too big to fail,” but our com- munity banks, while small, are too important to fail. Q A M ESSAGE FROM S ENATOR J OE M ANCHIN