A group of 29 Republican lawmakers wrote to Federal Reserve Vice Chairman for Supervision Randal Quarles today calling on the Fed to act swiftly to de-designate banks with $250 billion or less in assets as systemically important financial institutions. The lawmakers noted that there is no existing data to indicate that banks in this asset range pose a systemic threat to financial stability.
S. 2155, the new regulatory reform law, directs regulators to develop within 18 months an approach for applying enhanced prudential standards for banks between $100 billion and $250 billion. While Quarles earlier this summer pledged that the Fed would work to move sooner rather than later to develop that new framework, the lawmakers questioned the Fed’s commitment to remove SIFI status from banks under $250 billion that do not pose a systemic risk to the economy.
The lawmakers added that as the Fed develops its new supervisory approach, if it “does elect to apply enhanced prudential regulations to affirm of this size in the future, that decision must be based on clear data and evidence” that proves that the institution poses a systemic risk.