Fed’s Brainard Lists Reg Relief Measures With ‘Greatest Promise’

Federal Reserve Governor Lael Brainard at an EGRPRA outreach meeting today listed several areas that she believes “hold the greatest promise to reduce undue regulatory burden.” Many areas mentioned correspond to items on ABA’s Agenda for America’s Hometown Banks.

For example, Brainard noted that the Fed is exploring options for allowing smaller banks to achieve the goals of Basel III by holding a larger cushion of capital measured against a simpler definition of assets. ABA and the state bankers associations first proposed such relief for highly capitalized banks to regulators last year.

Brainard also suggested Congress should review the costs and benefits of the Dodd-Frank Act stress tests required of banks between $10 billion and $50 billion in assets, and she echoed suggestions that banks with less than $10 billion in assets be exempt from the Volcker Rule.

Other relief measures the Fed is considering include adjusting appraisal thresholds for small dollar real estate loans and expanding the number of banks eligible for the 18-month exam cycle.