As a result of the recent financial crisis and subsequent credit crunch, last month President Obama proposed a plan for regulatory reform in this country. In addition to dramatically expanding the power of the Federal Reserve, the president’s scheme would also create the Consumer Financial Protection Agency. This agency would be tasked with writing rules regarding consumer-related financial products, like credit and debit cards, and levying fines, as well as determining if consumer-related financial products are “too risky” for the American public.

I have very serious concerns about the impact this Consumer Financial Protection Agency will have on our community banks and smaller financial institutions, especially those in Oklahoma. Community banks had very little to do with the cause of the current financial crisis. Rather, they have served their communities well through these difficult times and continued to provide a reliable, and much needed, source of credit to their customers. Yet, once again, the Obama administration is asking them to pay for the mistakes made by the large financial institutions on Wall Street.

An uneven playing field already exists between big banks and local banks. Yet, rather than address this issue, the proposed Consumer Financial Protection Agency would only further disproportionately burden our local banks. As a result of the financial crisis, our community banks already are faced with paying higher fees for deposit insurance. While large banks are better equipped to handle the additional costs and regulations that will come with this new agency, smaller banks will have a more difficult time doing so. Much of these increased costs will be passed on to consumers in the form of higher fees and less availability to credit. In addition, these added costs could potentially drive many of our trusted community banks out of business.

It looks like once again Obama expects Main Street to pay for the mistakes made on Wall Street as he continues to back the idea of “too big to fail and too small to matter.”

The House Financial Services Committee will be holding several hearings on the president’s proposal this month, and as a senior member of this committee, I will continue to encourage the reconsideration of this controversial and damaging agency. I do not deny that some changes within our regulatory system are necessary. However, when considering how best to approach reform, we must not sacrifice the health of our small institutions that did not cause the current crisis and are critical to our country’s economic recovery.

U.S. Rep. Frank Lucas represents Oklahoma’s 3rd Congressional District. 

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