GOP, Democratic Senators Strike Bipartisan Reg Relief Deal

Numerous regulatory relief proposals long backed by American Bankers Association as part of its Blueprint for Growth are included in a bipartisan deal announced today by Senate Banking Committee Chairman Mike Crapo (R-Idaho). The compromise legislative package is supported by nine Republicans and nine Democrats — led by Banking Committee members Joe Donnelly (D-Ind.), Heidi Heitkamp (D-N.D.), Jon Tester (D-Mont.) and Mark Warner (D-Va.) — providing enough votes to clear procedural hurdles on the Senate floor.

ABA President and CEO Rob Nichols welcomed the announcement of the deal, which he said “shows that lawmakers of good faith from both parties can agree on commonsense changes to allow banks to better serve their customers and communities.” He added that it is an “important first step in right-sizing the rules for America’s banks” and urged lawmakers to support the package.

Among many other provisions, the bill would designate all mortgages held in portfolio as Qualified Mortgages for banks with less than $10 billion in assets, raise the threshold for designation as a systemically important financial institutions from $50 billion to $250 billion in assets, end stress tests entirely for banks with under $100 billion in assets, simplify capital calculations for community banks, provide relief from appraisal requirements for smaller mortgages, institute longer exam cycles for community banks and provide charter flexibility for federal thrifts with less than $15 billion in assets.

Nichols reiterated ABA’s longstanding opposition to arbitrary asset thresholds as a supervisory tool but said that “the proposal to lift the threshold for designated systemically important institutions will at least spare more banks from regulatory requirements that made little sense for institutions of their size. . . . ABA will continue to make the case that tailoring regulation based on a bank’s risk profile and business model — as a growing number of regulators support — is the best and most effective way to ensure banks are able to serve their communities while protecting safety and soundness.”