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Taking Stock: Regulators Report to Congress on S. 2155

By Bill Poquette, Editor-in-Chief

Just over six months ago, the banking industry was thrilled to welcome final passage of S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act. Finally, the decade-old Dodd-Frank curse was eased. Constant pressure from financial institution trade groups and their members led to rare bipartisan agreement on a package of relief measures holding great promise for the industry — especially community and regional banks — and the communities it serves.


A few parts of the legislation have been fully implemented, and more are in various stages of implementation. But there is a long way to go.

The arduous pace of regulation writing and rulemaking was recognized in early October during a hearing before the Senate Banking Committee featuring an all-star cast of regulators: Federal Reserve Vice Chairman for Supervision Randal Quarles, FDIC Chair Jelena McWilliams, Comptroller of the Currency Joseph Otting and National Credit Union Administration Chairman Mark McWatters. The process is well under way, they assured the lawmakers.

The Federal Reserve, with an interim rule, exempted most bank holding companies with less than $3 billion in assets from the board’s regulatory capital rules and comprehensive consolidated financial regulatory reports, Quarles noted. In August, he pointed out, the federal regulators adopted an interim final rule to expand eligibility for 18-month exam cycles to small firms up to $3 billion in assets. The board has effectively eliminated application of Dodd-Frank company-run stress requirement for BHCs with less than $100 billion in assets. Among rulemakings already issued, one amends liquidity rules to treat certain eligible municipal securities as high-quality liquid assets; another simplifies capital treatment of high-volatility commercial real estate exposures.

FDIC’s McWilliams pointed to measures that became effective immediately upon enactment. She reported that rural mortgage portfolio loans of less than $400,000 have been exempted from appraisals if a state — certified/licensed appraiser is not readily available. Also, under certain circumstances, reciprocal deposits will not now be considered brokered funds.

The OCC’s Otting added to the discussion one rule it was able to do on its own, which affords federal savings associations greater business flexibility without converting to national bank charters.

In a statement for the Banking Committee hearing, the Independent Community Bankers of America recognized regulators for their efforts to date in providing rules and guidance on S. 2155, and Chairman Mike Crapo, R-Idaho, for his oversight efforts to ensure they are implementing the legislation promptly.

“ICBA and the nation’s community bankers thank the regulatory agencies for swiftly enacting many provisions of S. 2155, but additional action is required on several key provisions to help community banks unleash their full economic potential,” said Rebeca Romero Rainey, the association’s president and CEO.

Likewise, Crapo led off the hearing with this statement: “Although agencies have started to consider this law in some of their statements and rulemakings, there is still a lot of work to do on the bill’s implementation. It is imperative that agencies carry out all of their responsibilities under this law expeditiously so that consumers, homeowners, veterans and small businesses can begin to fully experience its benefits.”

Were the regulators listening? It is to be hoped they were. Let’s keep the economy moving with banks unfettered as soon as possible from totally unnecessary rules and regulations.

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