Viewpoint: It's Your Turn, Senators. Say Yes to Reg Relief
Reich, John M., American Banker
Last week the House of Representatives passed the Financial Services Regulatory Relief Act by a vote of 415 to 2. The huge margin underscores the overwhelming bipartisan support in the House for easing the industry's regulatory burden.
HR 3505's many significant provisions, include elimination of the annual privacy notice requirement for institutions that do not share nonpublic personal information with third parties (and have not changed their policies); extension of the exam cycle from 12 to 18 months for well-capitalized, well-managed institutions with assets of less than $1 billion; and elimination of the requirement to file currency transaction reports for "seasoned" business customers.
As the leader of the interagency project conducted under the Economic Growth and Regulatory Paperwork Reduction Act, I was pleased to see bipartisan House action on HR 3505. I encourage the Senate to follow suit.
The Senate Banking Committee has been working for nearly two years on regulatory-relief legislation. Sen. Mike Crapo has taken the lead in drafting legislation for the committee and done an excellent job soliciting the views of all interested parties -- 187 proposals contained in the paperwork-reduction act's legislative matrix have been fully developed and vetted by all interested parties.
This required a tremendous effort by Sen. Crapo and his staff, as well as countless hours by the banking regulatory agencies, the industry, and consumer groups.
A few times in the past two years, I have testified before the Senate Banking Committee on the need for regulatory relief, joined by principals from the other federal banking agencies. Each of us supports several provisions for the institutions we supervise as well as for the industry as a whole.
In testimony before the committee a few weeks ago, Fed Governor Donald L. Kohn said the Federal Reserve is a "strong and active supporter of Congress' regulatory-relief efforts." OCC Senior Deputy Comptroller Julie Williams also expressed strong support for passage of a substantive reg-relief bill. And the OTS and FDIC have consistently called for a lighter regulatory burden.
This is an unprecedented level of interagency support for a collection of proposals on provisions that in many cases are of interest to just one agency. This suggests a unique circumstance and opportunity for Congress to act.
Some might ask why we need regulatory relief for an industry that continues to report record profits.
The answer is that increased responsibilities under the Bank Secrecy Act and USA Patriot Act, as well as new accounting rules and Privacy Act requirements, are punishing banks.
The federal banking agencies have promulgated more than 850 regulations and modifications since the passage in 1989 of the Financial Institutions Reform, Recovery, and Enforcement Act.
While regulatory requirements add up, little is done to eliminate outdated or unduly onerous provisions. …