Congress passed the regulatory law last year in an effort to prevent a repeat of the 2008 financial crisis. Small-bank executives have complained that it will cost them a lot of money to meet the new rules, even though they were not responsible for causing the financial crisis.
Bernanke said that the hundreds of community banks, those with assets below $10 billion, would play a vital role in the nation’s recovery because they are an important source of loans for small businesses.
Bernanke said it was fortunate that Congress had decided to preserve the Fed’s regulatory connection to small banks. In one version of the measure, the Fed would have lost the power to regulate them. But the law maintains the Fed’s powers and even broadened it to include thrift holding companies.
The Fed chairman said the broadened role for the central bank benefits everyone.
“We are delighted that, through our supervision, our gathering of economic intelligence, and the activities of our community affairs departments, we will be able to remain fully engaged with grass-roots America,’’ Bernanke said.
Bernanke said the Fed understood that Congress wanted to shield smaller banking institutions from the impact of a new law that requires large banks to trim debit card fees.
