The Independent Community Bankers of America celebrated new Senatelegislation introduced Wednesday by the bi-partisan duo of Sherrod Brown (D-Ohio) and David Vitter (R-La.) that would help eliminate the threatsposed by the “too-big-to-fail” institutions of more than $500billion in assets.

The Terminating Bailouts for Taxpayer Fairness Act of 2013, S.798, seeks to end federal subsidies and funding advantages forlarge banks that foster incentives for risky behavior and puttaxpayers at risk, its sponsors said.

It would also require regulators to abandon Basel III capital requirements for banks with fewer than $50billion in assets and create a new capital framework.

“ICBA applauds Senators Brown and Vitter for advancing thedebate to bring balance back to the financial servicesmarketplace,” said Bill Loving, ICBA chairman and president and CEOof Pendleton Community Bank in Franklin, W.Va.

“By imposing equity capital guidelines that are appropriatelyscaled to the size, scope and risk of the too-big-to-failinstitutions, this legislation will reduce systemic risk, protecttaxpayers and put our nation's community banks on a competitivelybalanced playing field,” Loving said.

The bill comes as the ICBA kicks off its annual WashingtonPolicy Summit in which congressional leaders speak to some 1,000bankers before they storm the hill to lobby lawmakers. The summitruns through Thursday at Washington's Omni Shoreham Hotel.

The legislation also includes regulatory relief measures forcommunity banks that expands the definition of “rural” for purposesof the qualified mortgage definition and addresses two items on thecredit union regulatory relief wish list: the elimination of theannual privacy policy mailing and an improved exam appealsprocess.

There was no mention of credit unions anywhere in the bill'stext.

John McKechnie, partner at the Washington lobby and strategyfirm Total Spectrum, said he had reviewed the bill and said itcould be a positive move for credit unions if it becomes a vehiclefor regulatory relief for both small banks and credit unions.

“However, if it simply focuses on banks, I think it will be amajor disappointment,” he said, adding, “and credit unions willhave to make sure Congress understands that we have a need forregulatory relief as well.”

McKechnie added that if Congress relieves banks of Basel IIIrequirements, credit unions should also be granted reform thatincludes supplemental capital.

CUNA Senior Vice President of Legislative Affairs Ryan Donovanechoed that sentiment, saying legislation to address community bankcapital standards should be paired with legislation to addresscredit union capital issues, particularly the ability of creditunions to accept supplemental forms of capital.

NAFCU Vice President of Legislative Affairs Brad Thaler firedoff a letter to Brown and Vitter earlier this week in anticipationof the bill, also urging the two to recognize the need forrisk-based capital for credit unions.