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BANKING & FINANCE

ABA to Congress: Growing volume of regulation harming community banks The growing volume of regulation is harming community banks’ ability to meet the needs of consumers across the country, according to testimony from the American Bankers Association before the Senate Banking Committee. Daniel Blanton, CEO of Southeastern Bank Financial Corporation and Georgia Bank & Trust in

Augusta, Georgia, testified on behalf of ABA. Blanton, who is also vice chairman of ABA, noted that while community banks are resilient, the avalanche of new rules has made it much more difficult to meet customer needs. “It is this regulatory burden that often pushes small banks to sell to banks many times their

Child advocates release report on effects of recession on children’s well being The Great Recession might be over, but its ripple effects continue to impact children in health care and many other ways, according to a new report issued by the bipartisan children’s advocacy organization First Focus and PolicyLab at The Children’s Hospital of Philadelphia. The report, The Effect of the Great Recession on Child Well-Being, was released on Feb. 3 in conjunction with a Congressional briefing that featured remarks from George Hoover, Pennsylvania Partnerships For Children (PPC) health policy director. Hoover discussed how the lack of health insurance can have a detrimental “snowball effect” on a child’s life, saying: ■ When parents lose their jobs, employerbased coverage is no longer available and quite often COBRA or private coverage becomes unaf-

fordable. ■ Children who have insurance generally have better school attendance, meaning they are likely to do better in school. In the long-term, this is better for the child, the family and our economy. ■ Children who lack insurance are less likely to see a doctor and get the preventive care they need, which can lead to delayed diagnoses and result in more severe medical problems and higher treatment costs. As of 2013, 14.7 million children were in poverty, a significant increase from the 12.8 million children in poverty before the recession began. The Effect of the Great Recession on Child Well-Being is a follow-up to a paper published in 2010 entitled The Effect of Recession on Child Well-Being.

size,” Blanton said. “In fact, today there are 1,200 fewer community banks than there were five years ago. This trend will continue unless some rational changes are made to provide relief to America’s hometown banks.” Blanton emphasized that regulation shapes the way banks do business and affects their ability to contribute to economic growth. “Every bank regulatory change directly affects the cost of providing banking products and services to customers,” Blanton said. “Even small changes can reduce credit availability, raise costs and drive consolidation. Everyone who uses banking products or services is impacted by changes in bank regulation.” Blanton’s testimony comes after ABA recently shared its legislative platform — focusing on helping America’s hometown banks serve their customers and grow the economy — with members of Congress. In addition, the association’s 2015 Key Banking Issues publication outlined four distinct areas where lawmakers can take action, including: ■ Removing impediments to serving customers; ■ Eliminating distortions by government in the marketplace; ■ Improving access to home loans; and ■ Facilitating growth to loans, jobs and the economy. Blanton encouraged Congress to work together

to pass bipartisan legislation in these areas, particularly in the mortgage space. “It is painfully clear that new regulatory requirements have restrained mortgage lending, and have made it particularly difficult for first-time homebuyers to obtain a home loan,” Blanton said. “Overregulation of the mortgage market has reduced credit available to bank customers, raised the cost of services and limited bank products. The result has been a housing market that still struggles to gain momentum.” Blanton urged Congress to ensure that loans held in portfolio are treated as “qualified mortgages,” noting that the Dodd-Frank Act’s restrictive definition of “ability to repay” is having a detrimental impact on the market and consumer access to credit. “Loans held in portfolio, by their very nature, demonstrate ability to repay,” Blanton said. “Simply put, banks would not stay in business very long if they made and held loans on their books that cannot be repaid.” Blanton closed his testimony by encouraging Congress to take additional actions to ease regulatory burden, including expanding the number of highly rated community banks eligible for an 18-month exam cycle, providing an independent appeals process for bank examination decisions and several other important measures. Learn more at aba.com.

Although herds increase, beef prices to stay ‘historically high’ U.S. beef cow inventory increased 2 percent from a year ago, signaling expansion among herds across the nation, according to the latest U.S. Department of Agriculture-National Agricultural Statistics Service cattle report. “I thought the report showed more beef cows added than I expected,” said Dr. David Anderson, Texas A&M AgriLife Extension Service livestock specialist, College Station. “But record prices in the last half of 2014 will do that.” Anderson said prior to the report, industry experts had believed the current rebuilding phase will be longer and slower. “It might have to be rethought,” he said. Seven percent more beef cows were reported in Texas on Jan. 1 compared to the same time last year. When the final numbers come in, Anderson said it could potentially be the largest year-over-

year percentage increase in Texas beef cows since 1972-1973 when the cowherd grew 14 percent. Cattle prices should remain historically high in 2015 as tight supplies of cattle continue. However, herd rebuilding is steadily increasing, according to the latest U.S. Department of Agriculture-National Agricultural Statistics Service cattle inventory report. According to the report, there were 89.8 million head of cattle and calves on U.S. farms.

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Northeast Pennsylvania Business Journal March 2015  

March 2015