Letter Supporting the Promoting New Bank Formation Act (H.R. 478/S. 113)

Dear Rep. Barr and Sen. Hyde-Smith:

The American Bankers Association (ABA) writes today in support of the Promoting New Bank Formation Act, recently introduced on Jan. 16. We welcome your efforts to incentivize the creation of new banks by establishing a three-year phase-in period for new banks to comply with federal capital standards, among other provisions designed to promote and sustain de novo banking.

Today, there are 4,316 fewer banks in the United States (4,517) than in 2005 (8,833), a precipitous 48.9 percent decline. Of the banks active today, only 79 were established after 2010.

By facilitating the formation of new banks in urban and rural areas, this legislation expands banking access for both individuals and small- and medium-sized businesses. The bill would unlock economic opportunity, growth, and investment in communities most in need, while also promoting competition. The temporary regulatory adjustments provided in this bill are a reasonable step to encourage de novo formation of banks that will be well equipped to serve and respond to the pressing banking and financial needs of their local communities. We believe that maintaining a robust, diverse banking industry is critical to ensuring access to capital across the country and should be a bipartisan issue.

Thank you for your leadership on this important legislation.

Sincerely,

Kirsten Sutton