Financial Services Committee RSS Articles

The Freedom Of The U.S. Capital Markets Is Under Attack

Tue, 15 May 2012 04:00:00 GMT

By REP. SCOTT GARRETT
Investor's Business Daily
Posted 05/14/2012 06:14 PM ET

Are you fed up with our lackluster recovery and stubbornly high unemployment? Do you wonder why, three years after we officially pulled out of the Great Recession, we still haven't hit our economic stride? Look no further than the current occupant of 1600 Pennsylvania Avenue.

The reason economic growth is stuck in neutral is because the Obama administration is determined to regulate risk out of our capital markets. Put another way, President Obama believes that state-controlled capitalism is the best path to economic prosperity.

As a free-market capitalist, I couldn't disagree more with President Obama's vision for America's economy. I believe that market-driven capitalism fueled by free ideas, free people and the freedom to take risk is what creates economic prosperity.

Robust economic growth requires healthy and dynamic capital markets, the ability to access credit and some good old-fashioned competition. In the past, policies mindful of basic economics allowed our capital markets to become the deepest and most liquid in the world.

In fact, our capital markets became the envy of the world specifically because government got out of the way so that they could flourish and grow.

Unfortunately, the story has changed dramatically over the last few years. Because of laws like Dodd-Frank and the tidal wave of regulations that are drowning our capital markets, pools of private capital have dried up, jobs creation has been placed on life support, and the global supremacy of our capital markets is now in jeopardy.

In the wake of Dodd-Frank, government control over every facet of our capital markets seems limitless. In particular, the Obama administration's policies have green-lighted the heavy hand of government to micromanage capital market liquidity; to dictate to banks and issuers what to do, how to do it and when to do it; to subordinate investor rights whenever government planners deem it politically expedient; and to impose new regulations that seek more government control over farming, manufacturing, and small businesses in the name of "financial reform."

Our financial system has become increasingly controlled by government regulators who inevitably fail. And what happens when they fail? They blame the private sector, and insist they could have done better if they had more power; which is exactly what they have done.

Emboldened by Dodd-Frank, safety and soundness regulators are now competing with capital markets regulators to see who can regulate the risk out of capital markets first. It's clear to anyone who is paying attention that the freedom of the U.S. capital markets is under attack.

In defense of this attack on our financial markets, we are told that Dodd-Frank is necessary to keep the financial system safe from future crises. If that's the stated goal, why are there so many glaring holes?

Dodd-Frank doesn't end the "too big to fail" doctrine; it doesn't address the banking system's ability to withstand "common shocks" to widely held assets; it doesn't change capital rules that treat sovereign debt as risk free; it doesn't end the failure of government-subsidized homeownership and the crony capitalism that comes along with it; and it doesn't end the worst example of subsidized central planning in U.S. history: Fannie Mae and Freddie Mac.

The Obama White House has justified its interventionist policies by blaming unregulated capitalistic forces for causing the financial crisis. In reality, though, the actual cause of the financial crisis and the breakdown in market-driven capitalism was the injection of government subsidies into the market and the failure of regulators to do their job, not capitalist risk-taking that Obama-appointed regulators are determined to wipe off the face of the earth.

For market-driven capitalism to work, you must have risk — period. The capital markets, by their very nature, are innovative and dynamic, with the assumption that a level of risk always exists.

If the goal of this administration's regulators is to eliminate all risk from our markets, no one will prosper — except perhaps the government. This is very dangerous, and it will have lasting implications on the competitiveness of our markets and on our economy unless we change course.

Economic prosperity does not come by allowing central planners to micromanage the U.S. financial system. Rather, economic prosperity requires respect for investor rights, honoring the sanctity of private contracts and sound money.

It also requires tearing down the barriers to capital formation, removing the burdens on small banks so they can lend to small businesses, and eliminating the subsidies that continue to create dislocations in market pricing.

The main function of the U.S. capital markets is to facilitate the flow of capital from those who have it to those who need it. President Obama's policies have disrupted that basic function. It's time for him to embrace risk-taking as a fundamental ingredient to free markets, job creation and economic prosperity.

• Garrett, a Republican who represents New Jersey's 5th congressional district, is chairman of the House financial services subcommittee on capital markets and government-sponsored enterprises.

Committee Continues Focus On Dodd-Frank’s Impact On Economy, Jobs

Tue, 15 May 2012 04:00:00 GMT

The Financial Services Committee continues its in-depth look at the 2,300-page Dodd-Frank Act with a subcommittee hearing on Wednesday examining the designation of non-bank financial institutions as “systemically important” – a euphemism for these institutions being deemed by government as “Too Big to Fail.”

The Financial Stability Oversight Council (FSOC) – an interagency body of regulators created by Dodd-Frank – issued a final rule and interpretive guidance describing how it will designate non-bank financial institutions as “systemically important” on April 3. During Wednesday’s hearing, members of the Financial Institutions and Consumer Credit Subcommittee will discuss what it means for a company to be designated “systemically important,” whether the designation provides firms with an advantage over their competitors, and how FSOC arrived at its final rule.

“Dodd-Frank did not end ‘Too Big to Fail,’ as its supporters claim; it enshrined ‘Too Big to Fail’ into law. When government declares a financial institution is ‘systemically important,’ it is saying that institution is ‘Too Big to Fail’ because of the perception the government will step in with a bailout to protect it from collapse,” said Chairman Spencer Bachus. “Bailouts must end – period.”

Subcommittee Chairman Shelley Moore Capito said the hearing will allow members to examine the rule’s impact on the economy. “There’s no question that we need to have the necessary safeguards in place to avoid another financial collapse, however we must ensure that new rules do not greatly inhibit economic growth,” said Chairman Capito. “We’ll also hear from witnesses representing entities that may be designated systemically important under the new rule in order to learn how the Federal Reserve’s proposed rule on supervision may impact their operations.”

The Subcommittee’s hearing will take place on Wednesday at 10 a.m. in room 2128 Rayburn House Office Building. Witnesses scheduled to testify at the hearing are:

Lance Auer, Deputy Assistant Secretary for Financial Institutions ,U.S. Department of the Treasury

Michael Gibson, Director, Division of Banking Supervision and Regulation, Board of Governors of the Federal Reserve System

Scott Harrington, Alan B. Miller Professor, Wharton School, University of Pennsylvania

Thomas Quaadman, Vice President, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce

William J. Wheeler, President, Americas, MetLife

Douglas Elliot, Fellow, The Brookings Institution

Committee to Review Regulators’ Settlement Practices

Tue, 15 May 2012 04:00:00 GMT

- The Financial Services Committee will hold a hearing on Thursday to examine the settlement practices of federal financial regulators.

Federal regulators often settle enforcement actions against defendants to quickly impose and collect fines or institute corrective actions rather than litigate lengthy and expensive trials whose outcomes are uncertain. However, these settlements often do not require the defendants to admit wrongdoing but they do have to be approved by a court.

The settlement practices of the Securities and Exchange Commission have come under particular scrutiny. Late last year, Federal District Court Judge Jed Rakoff rejected a $285 million settlement between the SEC and Citigroup Capital Markets in a case involving Citigroup’s marketing of certain mortgage-backed securities. In rejecting the settlement, Judge Rakoff said it was not in the public’s interest because the settlement did not include an admission of wrongdoing.

The SEC and Citigroup jointly appealed the decision and the Second Circuit Court of Appeals temporarily stayed Judge Rakoff’s order. The case is still pending appeal.

“Given the expense and uncertainty of trials, it makes sense to leave the judgment of whether to try a case or attempt to settle it to the regulators’ discretion,” said Chairman Spencer Bachus. “However, it is appropriate for the Committee to examine how and why the financial regulators resolve civil enforcement proceedings.”

The hearing will begin at 10 a.m. in room 2128 Rayburn House Office Building. Witnesses who are scheduled to testify at the hearing are:

Scott G. Alvarez, General Counsel, Board of Governors of the Federal Reserve System

Robert Khuzami, Director, Division of Enforcement, U.S. Securities and Exchange Commission

Richard J. Osterman, Jr., Deputy General Counsel, Litigation and Resolutions Branch, Federal Deposit Insurance Corporation

Daniel P. Stipano, Deputy Chief Counsel, Office of the Comptroller of the Currency

The Honorable William F. Galvin, Secretary of the Commonwealth Massachusetts

Richard W. Painter, Professor of Law, University of Minnesota Law School

Kenneth Rosen, Professor of Law, University of Alabama School of Law

Chairman Bachus Releases Statement on JPMorgan Chase Hearing

Tue, 15 May 2012 04:00:00 GMT

Financial Services Committee Chairman Spencer Bachus released the following statement on the Committee's plan to hold a hearing on the JPMorgan Chase trading loss that was disclosed last week:

"More facts about the trading loss by JPMorgan Chase are coming out every day. We know more today than we did yesterday, and we will know more tomorrow and in the coming days as new information comes to light. The Financial Services Committee will hold a hearing on the public policy implications of this trading loss, but we will not rush into a hearing simply to chase headlines. This will give the Committee and the regulators time to gather all the facts, do our homework and then have a serious hearing on this subject. One issue our hearing will address is the need for greater coordination between U.S. and U.K. regulators since many of our largest financial institutions maintain a significant percentage of their overseas holdings in the United Kingdom, and the JPMorgan trades in question were executed from the firm’s London office. In the interim, our committee is holding several other hearings that will give members opportunities to hear from and question witnesses, including regulators, on this trading loss," said Chairman Bachus.

Subcommittee to Vote on HUD Subpoena

Mon, 14 May 2012 04:00:00 GMT

The Oversight and Investigations Subcommittee will vote Wednesday on whether to subpoena documents from the Department of Housing and Urban Development related to the agency’s administration of the HOME Investment Partnership Program.

The HOME program is the nation’s largest federal public housing construction program and has received more than $30 billion from the taxpayers.

Over the course of the last year, the Subcommittee has uncovered waste, fraud and abuse in the program.

The subpoena would direct HUD to provide documents related to the agency’s ability to monitor and verify the status of HOME construction projects.

The Subcommittee first asked for these documents in November 2011. Despite repeated requests by the Subcommittee for the information and the Subcommittee’s agreement to reduce the number of documents it is seeking, HUD has been unwilling to cooperate.

“The documents we have requested are essential to our ongoing investigation to weed out waste, fraud, and abuse and see whether the HOME Program can be better run. For the last six months, we gave HUD every opportunity to voluntarily provide these documents and yet they have been anything but cooperative. The documents we are requesting are important to maintain the integrity of our investigation and ensure that taxpayer dollars are not wasted,” said Subcommittee Chairman Randy Neugebauer.

The Subcommittee will meet to vote on issuing the subpoena at 2 p.m. in room 2220 Rayburn House Office Building.

Rising Cost of Red Tape a Threat to Small Financial Institutions, Witnesses Tell Subcommittee

Wed, 09 May 2012 04:00:00 GMT

Small financial institutions are being hit especially hard by the rising cost of regulations, and the impact of more red tape is a threat to the existence of small town community banks and credit unions, witnesses told a House subcommittee on Wednesday.

“Each new law or regulation in isolation might be manageable, but wave after wave, one on top of another, will certainly over-run many more community banks,” William Grant, President and CEO of First United Bank and Trust in Oakland, Maryland, testified before the Financial Institutions and Consumer Credit Subcommittee.

A hearing witness representing a credit union based in South Carolina agreed. “While any one single regulation may not be particularly burdensome, the layering of new regulation on top of old and outdated regulation can completely overwhelm small financial service providers like credit unions,” said Ed Templeton, President and CEO of SRP Federal Credit Union.

Both Grant and Templeton also informed Subcommittee members about the costs – both direct and indirect – of complying with this rising tide of red tape.

Grant, who estimates it costs his small bank almost $3 million a year to comply with all the regulations, said that means his bank has to either offer fewer products and services or charge customers more for those services.

“Instead of money being used to make loans to hardworking people and businesses in our communities, it is being spent on consultants, lawyers and auditors. Instead of investing precious capital into new products to meet the ever-changing demands of our customers, banks are paying for changes to software that assure compliance with all the new changes,” Grant testified.

Templeton pointed to results of a 2011 survey that showed almost two-thirds of credit unions said they have increased or were considering increasing fees on products or services due to recent regulatory changes.

“Unfortunately, every dollar spent on compliance, whether stemming from a new law or outdated regulation, is a dollar that could have been used to reduce cost or provide additional services or loans to members,” he told the Subcommittee.

Members on the panel have heard similar complaints about the collective impact of red tape from community bankers and credit union leaders in a series of hearings on the subject. Over the last year, the Subcommittee has listened to officials from small financial institutions at field hearings in Georgia, Wisconsin, Texas and Ohio.

Many of the new regulations come from the Dodd-Frank Act passed by Congress and signed into law by President Obama in July 2010. Dodd-Frank requires federal regulators to write more than 400 new rules and requirements on financial institutions.

While supporters of Dodd-Frank said the law was aimed at “reforming” Wall Street, small institutions across the country – and far from Wall Street – are raising alarms about its impact.

“With Dodd-Frank alone, there are 3,894 pages of proposed regulations and 3,633 pages of final regulations, as of April 13, and we’re only a quarter of the way through the 400-plus rules,” said Grant, whose Maryland bank in is located in a rural Appalachian town of less than 2,000.

One of those Dodd-Frank regulations came under particular criticism from Grant.

“We thought that the Volcker rule was something that only our colleagues in the largest banks had to attend to.” Instead, Grant said, the regulators have proposed to implement the Volcker rule in a way that requires “even a bank of our size” to worry about it.

House Hearing to Examine Costs and Consequences of Dodd-Frank’s Conflict Mineral Provision

Wed, 09 May 2012 04:00:00 GMT

A House subcommittee on Thursday will examine an obscure provision buried deep in the 2,300-page Dodd-Frank Act that threatens to disadvantage U.S. manufacturers and has resulted in a de facto U.S. embargo of a war-torn African country.

The provision requires thousands of U.S. companies to disclose what steps they are taking to ensure that their products do not contain certain minerals mined in the Democratic Republic of the Congo, defined as “conflict minerals” by the Act.

The requirement has the potential to affect all of the nearly 6,000 publicly-traded companies in the U.S. because these “conflict minerals” are used to make a vast array of products, including consumer goods that contains electronic parts –such as cell phones, computers and music players.

“The conflict minerals provision was added to the Dodd-Frank Act with the best of intentions, but the unintended consequences are impossible to ignore. There are reports this provision is further impoverishing the very people it was supposed to help while doing nothing to stop the violence,” said Financial Services Committee Chairman Spencer Bachus.

The Subcommittee on International Monetary Policy and Trade, chaired by Rep. Gary Miller, will examine the provision and its impact on U.S. manufacturers and the people of Congo.

“I have called a hearing on this provision because it has the potential to kill thousands of American jobs and bury American companies under a mountain of paperwork. In addition, instead of reducing the conflict in eastern Congo, as hoped, it is making an already terrible situation even worse,” said Chairman Miller.

The Democratic Republic of the Congo has been in a state of civil war ever since it gained independence in 1960. In 2000, a United Nations group linked the civil war to the mineral trade, reporting factions in the war use proceeds from the sale of the minerals to buy weapons.

The Securities and Exchange Commission (SEC), which is directed by Dodd-Frank to issue the conflict minerals disclosure rules, has received comment letters from more than 30,000 individuals and organizations, representing a wide range of industries that stand to be affected. The SEC is still in the process of finalizing the regulations, which were originally due on April 15, 2011. The SEC has informed Congress it is grappling with a complex subject matter beyond its usual area of expertise.

However, in anticipation of those rules, most mineral procurement companies no longer purchase minerals from Congo. This de facto embargo has not ended the civil war nor improved the “daily lives of most Congolese,” writes Dr. Laura Seay, assistant professor of political science at Morehouse College, who will appear as a witness at the Subcommittee’s hearing.

Another witness who will appear at the hearing, Mvemba Dizolele, a Distinguished Visiting Fellow at Stanford University’s Hoover Institution, argued in the Huffington Post that the mineral trade is just one source of revenue for the armed groups but the source of income for many of the nation’s poor.

“Oversimplification of issues often produces inadequate, counterproductive policies. Dodd-Frank and its proponents who seek to curb U.S. companies penalize the people of eastern Congo, but do little to curtail the militias and their backers,” Dizolele wrote.

The Subcommittee hearing will take place on Thursday, May 10 at 10 a.m. in room 2128 Rayburn House Office Building.

A full list of hearing witnesses can be found here.

Hearing to Focus on Cost of Financial Red Tape

Mon, 07 May 2012 04:00:00 GMT

The rising cost of complying with federal regulations threatens the future of small banks and financial institutions across the country, and on Wednesday a House subcommittee will examine how the growth of this red tape hurts the economy, increases customers’ costs for basic banking services, and leads to fewer small banks and more large banks.

The Subcommittee on Financial Institutions and Consumer Credit will hear on Wednesday from witnesses from smaller institutions about how they plan to survive the regulatory onslaught.

“More than 400 new rules will be imposed on our economy because of the Dodd-Frank Act. While some of them are necessary, many will serve only to stifle economic growth and employment,” said Financial Services Committee Chairman Spencer Bachus. “As regulators write the rules mandated by Dodd-Frank, we must make certain they do not harm the economy by drowning small business lenders in a sea of red tape.”

Financial Institutions and Consumer Credit Subcommittee Chairman Shelley Moore Capito said, “This hearing builds upon field hearings we’ve hosted across the country regarding whether small financial institutions face significant regulatory burdens, and if so, guaranteeing that there is a workable regulatory regime so that these institutions can continue to survive and grow. We must ensure that we have a diverse financial system.”

The Dodd-Frank Act, passed by Congress in 2010, created numerous new governmental entities such as the Consumer Financial Protection Bureau and added a slew of new regulatory mandates.

For smaller financial institutions that do not benefit from the economies of scale of larger institutions, the costs of complying with regulations disproportionately impacts their ability to lend and offer the services that customers have come to expect such as free checking.

A recent survey from PricewaterhouseCoopers estimates that regulatory changes will likely depress revenues, increase operating costs and squeeze community bank profits. In that survey, nearly 90 percent of banking industry leaders cited over-regulation as the biggest threat to business.

The cost of complying with federal regulations comes not only in terms of money, but time as well. The Dodd-Frank Burden Tracker, an online resource found on the Financial Services Committee’s website (www.financialservices.house.gov/burdentracker ) shows that it take more than 24 million work hours each year for companies to comply with the first 185 of Dodd-Frank’s 400-plus rules.

This is not the first hearing the Subcommittee has held to examine the impact that regulations have on smaller banks and financial institutions. During the past year, the Subcommittee has held field hearings and heard directly from local bankers in Wisconsin, Texas, Illinois and Georgia.

Wednesday’s hearing will begin at 10 a.m. and will take place in room 2128 Rayburn House Office Building.

Subcommittee to Examine Proposals to Reform or Abolish Federal Reserve

Fri, 04 May 2012 04:00:00 GMT

The Financial Services Subcommittee on Domestic Monetary Policy and Technology, chaired by Rep. Ron Paul, will hold a hearing on Tuesday to examine six legislative proposals that either reform or abolish the Federal Reserve System.

“More and more people are beginning to understand just how destructive the Federal Reserve's monetary policy has been. I hope that this hearing will kick start a serious discussion on the need to rein in the Fed,” said Chairman Paul. “100 years is far too long for Congress to have taken a hands-off approach. The Fed continues to reward Wall Street banks while destroying the dollar’s purchasing power and driving up the cost of living for average Americans. This reckless behavior must come to an end.”

Calls for reforming various aspects of the Federal Reserve System have existed since its creation in 1913. However, with the onset of the financial crisis of 2008-2009 and during the prolonged recession, calls for reform have escalated.

The Federal Reserve responded to the financial crisis with unconventional monetary easing, leading some to claim the Federal Reserve attempted to do too much to stimulate economic growth and set the stage for sustained inflation when the economy recovers. Slow economic growth, however, has led others to argue the Federal Reserve has not done enough and must be more accommodative in its conduct of monetary policy.

The six proposals that will be discussed by the Subcommittee on Tuesday are:

· H.R. 245, introduced by Rep. Mike Pence

· H.R. 1094, the Federal Reserve Board Abolition Act, introduced by Rep. Paul

· H.R. 1401, the Democratizing the Federal Reserve System Act, introduced by Rep. Marcy Kaptur

· H.R. 2990, the National Emergency Employment Defense Act, introduced by Rep. Dennis Kucinich

· H.R. 3428, introduced by Rep. Barney Frank

· H.R. 4180, the Sound Dollar Act, introduced by Rep. Kevin Brady

The Subcommittee’s hearing will take place on Tuesday, May 8 at 10 a.m. in room 2128 Rayburn House Office Building.

JOBS Act Delivers Needed Red Tape Relief to Small Banks

Mon, 30 Apr 2012 04:00:00 GMT

The bipartisan JOBS Act arrives just in time to help small, community banks as they are “struggling to stay profitable in a period of low interest rates, stagnant lending and rising compliance costs from other new regulations,” the Wall Street Journal reports.

The JOBS (Jumpstart Our Business Startups) Act originated in the Financial Services Committee and is the culmination of an initiative started by Chairman Spencer Bachus last year to promote small business capital formation.

The Wall Street Journal article takes particular note of one provision of the JOBS Act that raises the number of shareholders at which small banks must register with the SEC from 500 shareholders to 2,000.

The change frees up small banks to raise capital by attracting new investors without taking on the red tape burdens that come with mandatory SEC registration and reporting. Filing quarterly and annual financial reports alone with the SEC can cost small banks as much as $200,000 a year.

This Wall Street Journal report follows:

Small Banks Get a Freer Hand
April 23, 2012

By ROBIN SIDEL

Jim Stein no longer has to worry when one of his shareholders dies or gets divorced.

As chief executive of Bank of Houston, Mr. Stein used to fret about tripping a regulation that required the community bank to register with the Securities and Exchange Commission if it has more than 500 shareholders. The bank, a unit of BOH Holdings Inc., carefully maintained its shareholder count at 350 because it wanted to avoid the cost and hassle of registering. But the level was always at risk of rising.

"One shareholder could turn into four through unexpected consequences," Mr. Stein said.

Now, Mr. Stein and other small-bank CEOs can stop counting shareholders as closely and turning potential investors away at the door. The JOBS Act signed into law this month includes a provision that raises the number of shareholders at which small banks must register with the SEC to 2,000. The JOBS Act aims to increase jobs by reducing regulations on companies.

The change means that small banks are free to raise capital by attracting new investors without taking on regulatory burdens that are associated with the SEC filings. It also could breathe some new life into bank mergers and acquisitions, which last year stood at the second-lowest level since 1980.

"This will create opportunities for us that didn't exist before," said Mr. Stein. The 7-year-old bank, which has six branches, wants to expand in the Houston area and potentially find a merger partner.

The new rule comes at a time when community institutions are struggling to stay profitable in a period of low interest rates, stagnant lending and rising compliance costs from other new regulations. Returns on assets at institutions with $1 billion or less in assets was a third less than the industry average in 2011, according to the Federal Deposit Insurance Corp.

The move potentially could affect hundreds of community banks around the country. Just 16% of the nation's roughly 7,400 banks and thrifts are publicly traded, according to research firm SNL Financial. Many of those are thinly traded, but most are required to file quarterly and annual financial reports with the securities agency.

The JOBS Act also makes it easier for small banks to deregister with the SEC, permitting them to do so with 1,200 shareholders, compared with the current threshold of 300.

Many banks aren't likely to raise their shareholder base; community banks are often closely held among a small group, especially those that are family-run institutions. Some, however, are eager to attract more capital and investors, especially if they can now avoid the expense, which could be as much as $200,000 a year, of filing quarterly and annual financial reports with the SEC.

Maintaining the shareholder numbers game has been tough for Roland Williams, who monitors the 492 holders at Post Oak Bank in Houston. As chief executive of the seven-branch bank, a unit of Post Oak Bancshares Inc., he already had resigned himself to breaking through 500 shareholders this year because the bank is planning to raise up to $20 million of capital.

"You just can't have enough capital," he said.

The new rule isn't expected to threaten the safety and soundness of the community-bank industry; banks of all sizes must regularly file financial data with the FDIC and submit to examinations from national and state regulators.

Industry consultants say the raising of the 500-shareholder rule could fuel new life in the strapped sector by giving banks flexibility to build new branches or pursue growth through mergers and acquisitions. Some industry observers have long said that the U.S. banking system would be more efficient with fewer institutions even though the number of commercial banks and thrifts already has dropped 60% since 1985.

Several bank executives said the 500-shareholder barrier prevented them from pursuing mergers because they didn't want to issue new shares.

The 500-shareholder bar "has been something on the mind of every board in every merger discussion," said Curtis Carpenter, managing director at Sheshunoff & Co., an Austin, Texas, investment firm that focuses on the banking industry.

The new threshold also is likely to trigger a wave of community-bank stock offerings, according to Mindi McClure, managing principal at Bear Cos., an investment firm in Arlington, Va., that specializes in community banks.

"Having an additional way for banks to get more shareholders is a real positive," she said.

Jack Hartings, chief executive at Peoples Bank Co. in Coldwater, Ohio, already had warned his 465 shareholders that the bank might have to pursue a reverse stock split in order to avoid tripping the 500-shareholder barrier. Mr. Hartings, whose bank is a unit of Peoples Holding Co., also dissuaded potential investors from buying stock, telling them, "We appreciate your confidence in the bank, but right now we are not seeking new shareholders."

Mr. Hartings said the bank has no immediate plans to expand its shareholder base as a result of the law even though "everyone likes to own a piece of a company that they see in town."

"We have willing buyers, but not many willing sellers," he said.

Assessing the Madoff Ponzi and the Need for Regulatory Reform

Mon, 05 Jan 2009 19:00:00 GMT

FHA Oversight of Loan Originators

Fri, 09 Jan 2009 15:00:00 GMT

Priorities for the Next Administration: Use of TARP Funds under EESA

Tue, 13 Jan 2009 19:00:00 GMT

Financial Services Committee to Meet to Organize Committee Membership for the 111th Congress

Tue, 27 Jan 2009 15:00:00 GMT

Resolution Adopting the Rules of the Committee on Financial Services and Subcommittee Assignments

Tue, 27 Jan 2009 15:00:00 GMT

Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for Homeowners, and other Enhancements, 111-1

Tue, 03 Feb 2009 07:00:00 GMT

Assessing the Madoff Ponzi Scheme and Regulatory Failures, 111-2

Wed, 04 Feb 2009 14:00:00 GMT

H.R. 786, to make permanent the temporary increase in deposit insurance coverage, H.R. 787, to make improvements in the Hope for Homeowners Program, H.R. 788, to provide a safe harbor for mortgage servicers who engage in specified mortgage loan modifications, and for other purposes

Wed, 04 Feb 2009 19:00:00 GMT

An Examination of the Extraordinary Efforts by the Federal Reserve Bank to Provide Liquidity in the Current Financial Crisis, 111-3

Tue, 10 Feb 2009 18:00:00 GMT

TARP Accountability: Use of Federal Assistance by the First TARP Recipients, 111-4

Wed, 11 Feb 2009 15:00:00 GMT