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Source: Congress.gov
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The committee will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. This hearing is entitled Making Community Banking Great Again. Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. I now recognize myself for a four-minute opening statement. Welcome to the House Financial Services Committee's first hearing for the 119th Congress. I'm delighted to serve as chair, and I look forward to working with my subcommittee chairs, Ranking Member Waters, and all the members of the committee to bring common sense back to financial and economic policy that will both foster prosperity and growth for all of our citizens. That's the change that President Trump ran on, and that's what we're going to do in this committee. It's been nearly 100 years since the House Financial Services Committee was chaired by somebody that had financial experience before their time in Congress. Many of you know that I was a community banker before being elected to Congress, and I want to bring being a banker and business vision to the committee, and one of the key pillars of that vision is indeed to try to make community banking great again. It's no coincidence that this is the theme for my first hearing of the chairmanship. Most countries have just a handful of large national banks, but the United States has a large and diverse banking system with thousands of banks from small and regional institutions to global money center banks that all coexist and work together with each other to meet the capital access needs and depository needs of our Americans. It's one of our great competitive advantages. Alexander Hamilton, our first Treasury Secretary, himself said, banks are the nurseries of the national wealth. When faced with unprecedented uncertainty during the time of the pandemic, it was our community banks that made an outsized share of the paycheck protection loans to small businesses, keeping millions of Americans employed. Community banks know their communities best, and research shows that when they close their doors, Americans suffer.
Right now, our community banks are disappearing across the country. Back in 1999, when I first founded my Arkansas-based company, Delta Trust and Banking Corp, the United States had over 8,500 FDIC-insured banks, including 190 new charters that year. Fast forward to today, the United States has 4,000 banks, while only 82 de novo charters have been issued since 2010. 2010. Small community banks and credit unions have suffered immensely under the regulatory requirements, forcing them to devote more and more resources to lawyers and check-the-box compliance programs instead of serving their customers. Back in 1995, Arkansas had 251 banks. Today, it's 77. However, our local community banks and credit unions did not contribute to the financial crisis. They've continued to serve the critical engines for local economies, despite being subjected to much of the same regulatory burden and regime as the largest, most complex institutions. To form a new bank today, Americans must submit a multi-year, high-cost endeavor with several different federal agencies just before they can be considered to open their doors. Initial capital requirements can be as high as $30 million in practice, making it nearly impossible to get started as an entrepreneur banker today. One founder in Texas told me that regulators were asking him to propose $50 million in paid-in capital before he could open his doors. Over the last year, I've met with bankers from across America, including in Arkansas, Texas, Ohio, Florida, Oklahoma, Louisiana, and elsewhere. And these visits have reinforced my view that we're not doing enough to ensure that banks of all sizes remain competitive, both in their business model and in their ability to attract growth capital. That's why last November I released my principles that we're starting to talk about today, making community banking great again.
30 plus reform ideas to enhance the ability for financial institutions to serve their customers, attract investment, and adopt and deploy technology and grow their communities. I look forward to working with all my colleagues to in fact bring that to fruition. I'd like to first have the ranking member and I visit about a point of personal privilege. I want to acknowledge two staffers for their service on our committee. First from the majority, Kim Betts and Larry Seyfried have done so much work to make this committee strong and outstanding over the past few years. Both are moving on. Friday will be their last day with the committee. Kim's been a key staffer here for the past six years. She's been general counsel, policy director, deputy staff director, and staff director. And Chairman Cole and Subcommittee Chairman Joyce have enticed her over to the House Appropriations Committee. So she won't be going far, and I consider her a world-class double agent. in appropriation, absolutely watching out for those of us on the authorizing committee. Larry's been served as Director of Member Services and Coalitions during the 118th Congress, Deputy Director of Coalitions in this Congress. His work to make sure our members and their offices get what they need to be successful has been integral to the success of our committee in the last Congress and this one. So we've benefited mightily from Kim and Larry's leadership and hard work, and I want to thank you for your service to our committee very much. And now I'd like to recognize my friend, the ranking member of the committee, the gentlewoman from California, for a point of personal privilege.
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