Senator Lankford Questions Treasury Nominee on Community Bank Leverage Ratios and Deposit Insurance

Community Bank Leverage Ratios

• 💡 Senator Lankford highlighted that community banks in his state need access to capital for small businesses.
• 🎯 He questioned Treasury nominee Jonathan McKernan about lowering the leverage ratio for community banks from 9% to 8%, noting it would open up capital access and still be less generous than big banks' ratios.
• 🔑 McKernan stated he has "no concern" with revisiting the community bank leverage ratio and would advocate for a "fresh look" at the issue if confirmed.

Challenges for Growing Community Banks

• 🚀 Lankford expressed frustration with rules that penalize community banks for growing, particularly nearing the $10 billion asset threshold which triggers more intense regulatory scrutiny and full-time examiners.
• 📌 He suggested this creates a disincentive for growth, forcing banks to remain smaller to avoid increased regulatory burdens.

Deposit Insurance and Bank Stability

• ⚠️ Lankford raised concerns about the differing treatment of failed banks, citing Silicon Valley Bank's full coverage versus a perceived "tough luck" approach for smaller Oklahoma banks.
• 📈 This disparity, he argued, creates instability and discourages investment in community banks due to uncertainty about deposit coverage for uninsured accounts.
• 🤝 McKernan acknowledged the perception that uninsured deposits at large banks are safer and that this disadvantages community banks.
• 💬 He mentioned the Treasury Secretary has floated the idea of lifting the cap on deposit insurance for business payment accounts, which would require legislation but could level the playing field.

Unaccompanied Minor Sponsorship

• ❓ Lankford inquired about the vetting process for sponsors of unaccompanied minors, noting that under a previous administration, sponsors were not always vetted for criminal background checks or legal presence.
• ✅ McKernan stated that under his proposed policies, safety will be prioritized over speed, ensuring the best interests of the children are central to all decisions.