Fed Is Speeding Regulatory Relief on Bank Lending

By Garsson, Robert M. | American Banker, March 5, 1993 | Go to article overview
Save to active project

Fed Is Speeding Regulatory Relief on Bank Lending

Garsson, Robert M., American Banker

WASHINGTON - The Clinton administration's long-awaited plan for regulatory relief will be unveiled soon and could receive final agency approvals in a matter of months, Federal Reserve Vice Chairman David Mullins said Thursday.

Though he was unwilling to provide new details, Mr. Mullins confirmed reports that the rules would permit banks to make loans based on a judgment about a borrower's character.

"Why shouldn't a well-capitalized, well-run bank be able to make whatever loan they feel comfortable with?" Mr. Mullins said at a hearing of the Senate Small Business Committee.

Evaluation as a Group

For loans below some specified level, he said, banks would be free to extend credit without meeting regulatory ratios or guidelines. The loans would be evaluated by examiners but as part of a larger portfolio.

"We will say to the banks, |we trust you,'" he added.

Although the Federal Reserve is an independent agency. it is participating with the Treasury Department and other bank supervisors in a review of regulations that inhibit lending to small businesses.

Mr. Mullins said the agencies were looking only at regulations that could be changed through administrative action, not through legislation.

But he said the Federal Financial Institutions Examination Council, an interagency group, was looking at areas that required legislation and would release a list in May.

Speedy Action Urged

Although the chairmen of the House and Senate banking committees have not demonstrated any enthusiasm for the banking industry's regulatory relief agenda, the Small Business Committee members urged Mr. Mullins to move as quickly as possible.

"It will take you a long time to implement this, and there is a real sense of urgency up here," said Sen. Joseph Lieberman, D-Conn. Legislation could move quickly "because of the mood up here," he said.

Mr. Mullins said recent banking laws and regulations had had the effect of making the lending process increasingly standardized, "more dependent on documentation, analytical formulas, and rigid rules as opposed to examiner judgments.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Fed Is Speeding Regulatory Relief on Bank Lending


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?