Legislation introduced by U.S. Sen. Mike Rounds (R-SD) would ease regulatory requirements on smaller banks and credit unions.
The Taking Account of Institutions with Low Operation Risk (TAILOR) Act would require federal regulatory agencies to take into account risk profiles and business models of institutions when crafting regulations. Rounds, a member of the Senate Banking, House and Urban Affairs Committee, said the legislation would help smaller banks who face higher costs in complying with federal regulations.
“During the Biden administration, financial institutions across South Dakota were negatively impacted by burdensome, unnecessary regulations due to disproportionate compliance costs, with consumers ultimately paying the price,” Rounds said. “This bill would ease the regulatory burden on smaller financial institutions so they can focus resources on taking care of their customers. I am pleased to reintroduce this legislation in the 119th Congress to codify changes that will allow small financial institutions to serve their customers instead of bureaucrats.”
The legislation would require agencies like the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve, The Federal Deposit Insurance Corporation, the National Credit Union Administration and the Consumer Financial Protection Bureau, to take into consideration a financial institution’s risk profile and business model when shaping regulations. Additionally, the bill would require the agencies to provide an annual report to Congress outlining steps they have taken to adjust regulations, as well as a report on the modernization of bank supervision; reduce reporting requirements for community banks; and require regulators to conduct a review of all the regulations issued since the 2010 passage of the Dodd-Frank Act and adjust regulations that do not meet with the TAILOR Act standards.
The legislation is co-sponsored by U.S. Sens. Kevin Cramer (R-N.D), Steve Daines (R-MT), Bill Hagerty (R-TN), Cynthia Lummis (R-WY), and Thom Tillis (R-NC).