Some bipartisan agreement on banking laws at Iowa forum
Gazette-Lee Des Moines Bureau
ALTOONA — There was some bipartisan agreement among Iowa’s federal representatives and candidates Thursday as they discussed banking laws and regulations at a forum hosted by an organization that represents community banks.
Democrats and Republicans at least partially agreed that portions of the regulations implemented after the 2008 financial crash are unfair to smaller banks, a farm credit program has expanded beyond its intended purpose and it would be fair to explore taxing and regulating large credit unions similarly to banks.
The remarks were made by many of Iowa’s congressional members and candidates at a forum hosted by the Community Bankers of Iowa at Prairie Meadows Convention Center. Democrats and Republicans fielded the same questions from the organization’s members at separate sessions.
There was bipartisan agreement that the Federal Farm Credit System needs more oversight in the wake of revelations it in recent years made loans to the technology company Verizon and the restaurant chain Cracker Barrel.
“The purpose is good, but like a lot of things that have been around 100 years, they’ve tried to outgrow the original purpose,” said Republican Rep. Rod Blum from eastern Iowa’s 1st District. “We need to make sure that they are not competing in areas they’re not supposed to be in.”
Democrats had a similar response.
“I would look at having a little more monitoring of that, because I don’t think it’s fair,” said Kim Weaver, a Democrat running in western Iowa’s 4th House District. “They tend to go after large borrowers. How is that helping the small family farmers?”
Patty Judge, the Democratic candidate for Senate, said the issue should be raised as the next farm bill is negotiated in Congress.
The representatives and candidates largely agreed that the Dodd-Frank Act, which was designed to control large banks that were at the heart of the 2008 financial crash, is overly punitive on small ones.
Judge said that Dodd-Frank’s “one size fits all approach” does not work and that she supports providing some relief for community banks.
Republicans wanted to go further; many used the issue to suggest the executive branch has been granted too much rule-making authority.
“We need to make sure that no regulation that goes into effect does so without an up-or-down vote of the Congress of the United States,” said Chuck Grassley, Iowa’s Republican senator who is being challenged by Judge. “We’ve delegated too much power to the bureaucracy.”
The federal representatives and candidates also indicated a willingness to examine how credit unions are taxed and regulated. Banks have grown increasingly concerned that some large credit unions enjoy more relaxed tax and regulatory structures despite offer services similar to banks.
A representative for Iowa’s credit unions later pushed back.
“We’re taxed differently because we’re structured differently. We’re not-for-profit; they are for-profit,” said Jon Murphy, director of government affairs for the Iowa Credit Union League.