Westmoreland grills bank regulators on community bank failures

by Special Reports

Third District Congressman Lynn Westmoreland, R-Third District Ga., Thursday grilled federal bank regulators about community bank failures.

The U.S. House Financial Services Subcommittee on Financial Institutions and Consumer Credit Thursday held a hearing on several studies recently completed by the Federal Deposit Insurance Corporation (FDIC), the FDIC Inspector General (FDIC IG), and the Government Accountability Office (GAO).

The FDIC IG and GAO studies were done in compliance with legislation Congressman Westmoreland drafted and was signed into law in December 2011 (Pub. L. No. 112-88). Witnesses included representatives from the FDIC and GAO and the FDIC IG.

“I want to thank the witnesses for testifying,” stated Westmoreland.

“Unfortunately these studies and their testimony today just seemed to raise more questions instead of answering those out there. Even Director Evans from the GAO said that more study was needed on the impact appraisals are having on community banks and the economy,” he said.

“I think these studies and today’s hearing are good first steps, but we still have a lot to do in order to truly get to the root of the cause of so many community bank closures,” he said. “Community banks are the economic engine of so many of our towns and cities, especially in Georgia, and when they close their doors we often see local economic investment dry up. I will continue to investigate this issue and look forward to working with my colleagues on the committee on solutions to this very serious problem.”

The hearing, titled “State of Community Banking: Is the Current Regulatory Environment Adversely Affecting Community Financial Institutions?,” was held to discuss the findings from the studies.

Members on both sides of the aisle expressed their serious concern with the large number of failures of community banks, according to Westmoreland’s Washington staff, and Congresswoman Carolyn Maloney (NY-14) specifically pointed out this is not just a problem in smaller towns – urban areas are seeing their community banks closing as well, to their detriment.

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