A state banking official said Friday that a House committee's passage of a bill that would create another regulator is "concerning."
Shawn Mitchell, president and CEO of the Community Bankers Association of Kansas, said the House Financial Services Committee's passage Thursday of the Consumer Financial Protection Agency Act is concerning to his group because small banks already have enough oversight.
Adding yet another regulator could mean small banks, which don't have the staffing that larger banks have to devote to regulatory compliance, will spend more time dealing with regulators than serving their customers.
"Your running banks now with two exams," Mitchell said of banks that receive examinations from state examiners and examiners from the Federal Deposit Insurance Corp.
The creation of another agency to oversee banks "is going to be complete regulatory overkill," he said.
He said CBAK doesn't oppose an agency whose mission is to protect consumers.
"We agree with the theory that you need better consumer protection," Mitchell said.
But it does oppose an agency that could override banks' other regulators, as well as the idea of having three examinations each exam cycle.
"It's on everyone's mind," he said. I've been in six banks the last three days, and this exact legislation has come up in every meeting."
Consumer groups such as Americans for Financial Reform see the agency as necessary and key to restoring "big banks' systematic dismantling of the financial protections put in place after the Great Depression," Heather Booth, director of the advocacy group, said in a statement.
The bill has a ways to go to become reality.
It must still pass the full House and the Senate also has to take it up.