Banks and credit unions don’t always agree on much, but they agree on this: Sen. Jon Tester stood up for Montana’s communities, and their small banks and credit unions, when he helped author a bipartisan bill to provide regulatory relief to certain financial institutions.

The Dodd-Frank Act was a “one-size-fits-all” congressional response to the 2008 financial crisis designed to address the risky decisions made by “too big to fail” Wall Street banks. It was 2,300 pages long and created more than 400 new regulations. While these regulations were designed for Wall Street banks, they also applied to small banks and credit unions in Montana that had nothing to do with the financial crisis.

The huge costs of complying with these regulations left numerous community banks and credit unions with little choice but to merge themselves out of existence to best serve the interests of their customers, members and shareholders. The bill by Sen. Tester doesn’t deregulate banks and credit unions; we are still one of the most heavily regulated industries in the U.S. It is, however, an attempt to right-size those regulations to prevent “too big to fail” from becoming “too small to succeed.”

Some critics may suggest that Montanans aren’t worried about over-regulating banks, but it’s fair to say that Montanans are worried about being able to get loans when they need them without a bunch of unnecessary red tape brought on by burdensome regulations. They are worried about whether their kids will be able to finance the family ranch. They are worried about qualifying to expand their restaurant.

Sen. Tester’s bill takes significant steps to fix this problem and helps Montanans in the process. It will make it easier for small banks and credit unions to support Montana’s small businesses, ranches and farms. It will make it easier for Montanans to get mortgage loans in rural areas. It will let Montana’s banks and credit unions spend fewer resources complying with regulations designed for Wall Street banks and focus their resources on serving the communities and people of Montana. Sen. Tester’s bill also makes it easier for Montana’s community banks and credit unions to stay in business.


“Tester’s bill is an attempt to right-size banking regulations to prevent ‘too big to fail’ from becoming ‘too small to succeed.’”


Some may measure the health of financial institutions by whether or not they “fail.” In this highly regulated industry, banks and credit unions rarely fail. But it is a fact that many Montana financial institutions have merged out of existence. Fewer small banks and credit unions in Montana’s small communities means fewer lenders who understand small-town economies and the hardworking Montanans who live and work in them. The severe decline in recent years in the total number of local community banks and credit unions should concern all Montanans.

There exists fear mongering about another financial crisis due to a surprising lack of understanding of Sen. Tester’s bill. The bill does not deregulate Wall Street banks, nor does it permit the behaviors that led to the financial crisis in 2008. Anyone that has paid attention to what happens in Washington, D.C., knows that Congress often makes mistakes and that even well-intended efforts by Congress can have unintended negative consequences. It should surprise no one that Dodd-Frank needs corrections.

Just last week, former Sen. Chris Dodd and former Congressman Barney Frank, the authors of the Dodd-Frank Act, wrote, “The bill helps credit unions and community banks that are the lifeblood of rural communities. Frankly, these banks haven’t been the problem and Jon knows that because he’s from a rural community.”

Sen. Tester went against many in his own party and worked on a bipartisan regulatory relief bill because he knows that right-sizing these regulations is essential to getting more capital in Montana’s small towns and cities. Sen. Tester should be applauded, not criticized, for his courageous work to help hardworking Montanans who rely on local banks and credit unions every day to meet their banking and credit needs so they can run and grow their businesses and provide for their families.

Tom Boos is president and CEO of Billings Federal Credit Union, with $143 million in assets, and chairman of the Montana Credit Union League. Tom Christnacht is president and CEO of First Security Bank of Deer Lodge, with $35.6 million in assets, and chairman of the Montana Independent Bankers Association. Rex Phipps is EVP and CEO of Garfield County Bank in Jordan, with $87 million in assets, and chairman of the Montana Bankers Association.

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