As the only community banker serving in the Arkansas State House, I carry with me not just a title, but a deep, personal understanding of the people behind the numbers. As a community development officer at Generations Bank, I have a front-row seat to the economic realities our communities face.
Every day, I sit across the table from neighbors who are small business owners trying to access capital, families hoping to buy their first home, and retirees working to make their savings last so they can live comfortably. These relationships have defined my career and shaped the way I approach policymaking. That’s why I’m calling attention to a dangerous loophole in the GENIUS Act that could have devastating consequences for our communities.
This loophole allows cryptocurrency platforms to offer generous incentives, like high-yield rewards, without following the same FDIC regulations that community banks are required to uphold. In effect, it creates a two-tiered system: one set of rules for traditional, regulated financial institutions, and another for fast-moving crypto platforms with little to no consumer protections.
Consumers, especially younger people, are no doubt attracted to these rewards and it’s hard not to be, considering the fast money that is promised. But what they don’t know is that funds held on crypto platforms have neither insurance nor accountability. If something goes wrong, there is no safety net. No FDIC insurance. No recourse. And for too many families, that can mean the loss of everything they’ve worked hard for.
Meanwhile, the money flowing into these unregulated platforms isn’t just coming from personal savings accounts. It’s worse, it’s being pulled from accounts held and protected by local community banks, which depend on those deposits to provide loans to small businesses, first-time homebuyers and the agricultural community. Community banks help push their local economies forward and when their deposit base erodes, so does their ability to support the very communities they serve.
As a community banker myself, this hits especially close to home for me. I know the names and stories of the people behind those small business loans. I’ve celebrated with families as they’ve moved into their first homes. And I’ve sat with customers navigating hard financial times. That kind of relationship with your local bank is irreplaceable, and right now it’s at risk if this loophole isn’t closed.
Local businesses don’t have easy access to investors. They rely on relationship-based lending from trusted, local community banks. If crypto platforms pull deposits away from community banks, they’ll be left out in the cold and we will have the GENIUS Act loophole to thank for that.
I see how laws can sometimes have unintended consequences, but I also know that as policymakers, it is our duty to right those wrongs. That’s why I urge Congress, especially Senator Tom Cotton, to lead the effort on closing the GENIUS Act loophole. We can’t watch from the sidelines as cryptocurrency companies act as banks, providing rewards, without following the regulations that protect Arkansans.
Editor’s note: The author of this commentary, Rep. Randy Torres, R-Siloam Springs, is a community development officer at Generations Bank and President/CEO of the Siloam Springs Chamber of Commerce.