U.S. Sen. Mike Rounds (R-SD) reintroduced a bill to require federal regulatory agencies to consider risk profiles and business models of financial institutions when drafting regulations.
The Taking Account of Institutions with Low Operation Risk (TAILOR) Act would require regulatory agencies, such as the Office of the Comptroller of the Currency, Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration and the Consumer Financial Protection Bureau, to tailor regulations based on the risk profiles and business models of the companies that they would impact. The agencies would also have to provide an annual report to Congress outlining how they have tailored their regulations.
“Financial institutions across South Dakota have been negatively impacted by burdensome, unnecessary regulations because of disproportionate compliance costs since the passage of the Dodd-Frank Act in 2010,” said Rounds, a member of the Senate Committee on Banking, Housing and Urban Affairs.
“Excessive costs and regulatory hurdles continue to hurt consumers the most. The TAILOR Act would ease the regulatory burden on smaller financial institutions so they can focus their resources on taking care of their customers, rather than spending time and money on compliance, the costs of which are ultimately passed onto the consumer in South Dakota. I look forward to working with my colleagues on this important legislation so our smaller financial institutions are better able to meet the needs of families and local businesses,” Rounds said.
The TAILOR Act also requires regulators to go back and review all the regulations issued by the agencies since the Dodd-Frank Act was passed in 2010. Agencies would be required to revise their regulations if the review finds that they do not conform to the TAILOR Act.
“South Dakota is home to some of the smallest and the largest banks in the world, with wide variations in their business models,” Curt Everson, president of the South Dakota Bankers Association, said. “Bankers from those institutions agree that today’s one-size-fits-all regulatory scheme doesn’t make sense.”