The Financial Services Roundtable (FSR) urged the Senate to adopt the Economic Growth, Regulatory Relief and Consumer Protection Act, a bill that would roll back certain regulations for banks.
The bill (S.2155), sponsored by Sen. Mike Crapo (R-ID), would exempt most community banks from the Volcker Rule and expand access to the Federal Reserve’s Small Bank Holding Company Policy Statement to help more community banks build capital. Further, it would improve regulatory treatment of reciprocal deposits and certain municipal securities, include higher asset thresholds for systemically important financial institution designations, and ease stress testing requirements.
In addition, it would allow banks to offer products and services entirely through online and mobile channels outside their geographic footprint.
“In crafting S. 2155, Chairman Crapo and a bipartisan group of key Senators provided thoughtful leadership in an effort to modernize regulatory requirements so financial institutions can better serve clients, communities and the broader goal of job growth,” FSR CEO Tim Pawlenty wrote in a letter to Senate leadership. “This bipartisan legislation takes important steps to improve our nation’s financial regulatory system.”
The Senate is expected to act on the legislation this week.
“FSR believes regulators should apply an activities-based approach, rather than using arbitrary asset thresholds, to assess risk and determine when heightened standards need to be applied to a particular financial institution,” Pawlenty wrote. “FSR urges Senators to consider including such additional ‘tailoring’ in this legislation so regulations relating to all financial institutions are properly calibrated. This would allow regulators to consider multiple factors in assessing risk and the need for enhanced standards and review.”