Powell: Fed Tailoring Regs to Minimize Community Bank Impact

Federal Reserve Governor Jerome Powell today acknowledged that many post-financial crisis regulations not aimed at community banks are nonetheless affecting them.

“Community banks face significant challenges today,” Powell said in a speech in New York, noting the effects of the recession and historically low net interest margins. He added that “although not aimed at community banks, new post-crisis regulations meant to strengthen the financial system are coming into place that require additional management attention.”

Powell said the Fed seeks to tailor its regulations to fit the banks’ size and risk profiles. He joined other top regulators in endorsing a legislative tweak that would exempt banks with less than $10 billion in assets from the Volcker Rule and the Dodd-Frank incentive compensation rules. He also said that the Fed has received “mostly positive” feedback about recent examination changes to expand off-site exams and conduct risk assessments in advance.