The House Financial Services Committee, chaired by French Hill (AR-02), convened today to discuss the state of community banking in the United States. This hearing marks the first under Hill's leadership in the 119th Congress.
Chairman Hill expressed his commitment to revitalizing community banks, emphasizing their importance as a foundation for local communities. He stated, "I’m delighted to serve as chair and look forward to working with my Subcommittee Chairs, Ranking Member Waters, and all members of this Committee to bring common sense back to financial and economic policy that will foster prosperity and growth for all our citizens."
Hill highlighted the unique position of the U.S. banking system, noting its diversity compared to other countries that primarily rely on a few large national banks. He remarked on how community banks played a significant role during the pandemic by issuing Paycheck Protection Program loans, thus supporting small businesses.
Despite their contributions, community banks are dwindling across America due to stringent regulatory requirements. Hill shared statistics showing a decrease from over 8,500 FDIC-insured banks in 1999 to just over 4,000 today. He pointed out that forming new banks has become challenging due to high initial capital requirements and lengthy approval processes.
Reflecting on his experience as a former community banker, Hill introduced several reform ideas aimed at improving conditions for these institutions. He mentioned meeting with bankers across various states and reinforced his belief that more needs to be done to ensure competitiveness among banks of all sizes.
Hill concluded with an appeal for bipartisan cooperation: "I know that if we put partisan politics aside, we can work together on commonsense reforms that will allow community banks to thrive again."