By Katalina M. Bianco, J.D.
Representative Scott Tipton (R-Colo) has written a letter, signed by more than 130 bipartisan lawmakers, to federal bank regulators “to express our deep concern over the crushing impact that ever-expanding regulatory burdens are having on the ability of our nation’s financial institutions, particularly community banks, to serve the economic needs of our growing economy.” Tipton and his colleagues are disputing regulators’ claims that they are effectively tailoring regulation and requested detailed information on what steps the agencies are taking to tailor regulations to fit the business models of the institutions they regulate.
Specific information requested. In their letter to the heads of the Consumer Financial Protection Bureau, Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration, the legislators wrote, “Increasingly, duplicative and ‘one-size-fits-all’ regulations, imposed by multiple federal agencies, stifle financial institutions’, including community banks, abilities to serve their local communities.” The representatives asked regulators to identify specific major areas in which they have taken action to tailor rules to the business model and risk of institutions or classes of institutions and in which areas the regulators lack the authority to tailor regulations. The lawmakers also want to know if there are any specific areas in which regulators are contemplating taking additional steps to tailor regulations and how they plan on doing so.
Legislation. On March 2, the House Financial Services Committee passed legislation authored by Tipton, the Taking Account of Institutions with Low Operation Risk (TAILOR) Act of 2015 (H.R. 2896). The measure would promote tiered regulation of the banking industry by requiring federal regulatory agencies to tailor regulations to fit the business model and risk profile of institutions. H.R. 2896 passed the committee 34-22.
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