On March 24, 2009, the Senate Committee on Banking, Housing and Urban Affairs held the second of a series of hearings on the need to modernize bank supervision and regulation. Part I of the hearing included representatives from the state and federal regulatory agencies. Part II provided an opportunity for the Committee to hear from the nation’s banks and credit unions, as well as independent industry analysts. Witnesses included:

  • William Attridge, President, CEO and COO, Community River Community Bank, on behalf of the Independent Community Bankers of America (ICBA).
  • Daniel A. Mica, President and CEO, Credit Union National Association (CUNA).
  • Aubrey Patterson, Chairman and CEO, BancorpSouth, Inc., on behalf of the American Bankers Association (ABA).
  • Richard Christopher Whalen, Senior Vice President and Managing Director, Institutional Risk Analytics.
  • Gail Hillebrand, Senior Attorney, Consumers Union of U.S., Inc.

The witnesses generally agreed that some form of “systemic risk” regulator was needed to oversee financial institutions and that congressional action was needed to “address gaps in our regulatory system.” However, the composition of future bank regulation and supervision remained a topic of debate. Representatives of the ICBA and ABA generally supported the continued use of multiple federal regulatory agencies and the need to maintain the dual banking system for safety and soundness regulation. Mr. Whalen, however, argued for the combination of the “regulatory resources of the Federal Reserve Banks, SEC, the OCC, and the Office of Thrift Supervision, to create a new safety-and-soundness agency...responsible for setting broad federal standards for compliance with law and regulation, capital adequacy and consumer protection....” Mr. Mica, from CUNA, noted that any regulatory reform of credit union industry should be narrowly tailored and that Congress should focus “on institutions whose operations and actions present the greatest risk....” He also testified that “credit unions have not posed any systemic risks to the financial system or otherwise been the cause of the current economic crisis” and that “only minimal changes need to be made to the regulatory structure of credit unions....”