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Skelton urges ‘more thoughtful’ application of loan rules to small banks
Skelton urges ‘more thoughtful’ application of loan rules to small banks

Congressman Ike Skelton
WASHINGTON, D.C. (Nov. 25, 2009) — Today, Congressman Ike Skelton (D-Mo.) sent a letter to federal bank regulators, including Federal Reserve Chairman Benjamin Bernanke and Federal Deposit Insurance Corporation Chairwoman Sheila Bair, to urge them to carefully review the lending restrictions placed on community banks and credit unions by financial regulators in the field.


November 25, 2009

The Honorable Ben Bernanke, Chairman
Board of Governors of the Federal Reserve System
Washington, D.C. 20551

The Honorable John Dugan
Comptroller of the Currency
Washington, D.C. 20219

The Honorable John Bowman, Acting Director
Office of Thrift Supervision
Washington, D.C. 20552

The Honorable Sheila Bair, Chairwoman
Federal Deposit Insurance Corporation
Washington, D.C. 20429

The Honorable Debbie Matz, Chairwoman
National Credit Union Administration
Alexandria, VA 22314

Dear Chairman Bernanke, Chairwoman Bair, Comptroller Dugan, Chairwoman Matz, and Acting Director Bowman,

In rural Missouri, community banks and credit unions help to drive economic development by lending money to families, to businesses, and to farmers. These resources allow families to pay for home improvements and allow businesses and farmers to expand their operations or pay for needed supplies. Lending institutions help to create jobs and sustain economic growth, which is especially critical as the United States works its way out of a severe economic recession.

Over the past year, I have talked extensively about the economy with community bankers, credit union officials, Realtors, developers, and farmers. In nearly each of these meetings, I have heard a common theme — small town lending institutions did not take part in creating the economic crisis but they are feeling increased pressure to restrict lending by financial regulators in the field. This worries me a great deal.

I realize that breakdowns in financial regulation contributed to the economic crisis and that bank regulators must sustain core safety and soundness principles of bank regulation. But, the malfeasance that ignited the financial crisis generally occurred within large Wall Street banks and within non-bank lending markets. By and large, small town lending institutions did not contribute to the economic mess created by Wall Street’s greed.

In my view, bank regulators in the field ought to be more thoughtful and measured when reviewing the books at community banks and credit unions. It does not serve the American people well to constrict lending opportunities at healthy banks and credit unions at the very time when our nation needs these lending institutions to lend money to families, businesses, and farmers.

I hope that you will each carefully review this situation and speak to your field regulators about the concerns of my community banks and credit unions. Please get back to me at your earliest convenience.

Very truly yours,
Ike Skelton
Member of Congress

Congressman Ike Skelton (D-Mo.) serves as chairman of the House Armed Services Committee. Congressman Skelton’s website is at www.house.gov/skelton.

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