Clinton wants relief for community banks

Democratic presidential frontrunner Hillary ClintonHillary Diane Rodham ClintonSusan Rice sees stock rise in Biden VP race Democrats try to turn now into November The Memo: Unhappy voters could deliver political shocks beyond Trump MORE called for regulatory relief for community banks during a campaign stop in Cedar Falls, Iowa, on Tuesday.

She also panned Republican efforts to overhaul the 2010 Dodd-Frank Wall Street reform law.

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Vowing to be a “small business president,” Clinton said she wants to cut regulatory red tape for community banks so that more small businesses can get loans.

“What was meant to reign-in 'too big to fail' has actually fallen actually harder on them,” Clinton said of small businesses and community banks. “They need relief because they were not part of the problem and yet they're in some ways paying a disproportionate price for our efforts to try to restrain the behavior on the big banks.”

She alluded to a financial overhaul proposal put forth earlier this month by Senate Banking Committee chairman Richard ShelbyRichard Craig ShelbyFights over police reform, COVID-19 delay Senate appropriations markups Trump's push for major infrastructure bill faces GOP opposition Watchdogs express concern to lawmakers about ability to oversee coronavirus relief funds MORE (R-Ala.) as a “trojan horse.”

“The Republicans insist on using this issue to give relief to community banks as a trojan horse for rolling back protections from consumers and rolling back the rules on the biggest banks, as we're seeing right now in legislation that Republicans are introducing,” Clinton said. “We should call this what it is: a cynical attempt to game the system for those at the top. “

Her attacks on the GOP proposals come as the White House has dubbed Shelby's efforts “worrisome” and Sen. Sherrod Brown (D-Ohio), the panel's top Democrat, has described it as an attempt to “dismantle Dodd-Frank's consumer protections.”

Clinton echoed that rhetoric in her campaign remarks.

“We ought to be able to walk and chew gum at the same time,” she said. “We ought to keep the regulations where they belong for the big banks and provide relief for community banks.”

Community bankers have a robust lobbying operation in Washington and have fought for years to loosen Dodd-Frank's regulatory impact on their industry, arguing that the rules written for big banks shouldn't be applied to smaller banks.

“Now let's be clear about this — it's not the big banks that need relief from Washington. It's small banks and small businesses. We should be doing more to reign in risky behavior on Wall Street and 'too big to fail' banks -- not less,” she said. “I fully support the regulations from Dodd-Frank on the big banks, but we should pass common sense community banking reform right now.”

Earlier Tuesday, Brown led the Senate Banking Committee Democrats to introduce a community banking proposal built on the bipartisan reforms included in Shelby's proposal — but without the provisions that Brown and other progressives oppose.