As part of a congressionally mandated review of regulation by federal agencies, the American Bankers Association yesterday submitted a list of recommendations to reduce the regulatory burden on banks.
The Economic Growth and Regulatory Paperwork Reduction Act, or EGRPRA, requires the Federal Financial Institutions Examination Council and bank regulators to review their regulations every 10 years to identify any outdated or otherwise unnecessary regulatory requirements for their supervised institutions. As part of a two-year review, the agencies divided their regulations into 12 categories. ABA’s recommendations were in response to the fourth round of review, in which agencies solicited comments on regulations in three categories — banking operations, capital, and the Community Reinvestment Act. ABA had previously sent three letters urging agencies to use the EGRPRA review to provide meaningful relief for banks.
Among its recommendations, ABA asked that the Federal Reserve rescind its rule implementing Regulation II, which sets standards for debit card interchange fees. The rule “imposes new, vague responsibilities on issuers for transaction types that do not exist under either the Durbin Amendment or Regulation II and requires issuers to undertake expensive and time-consuming efforts to change their core network infrastructure,” the association said. It added that a new rule should be narrower in scope.
ABA also offered recommendations for reforming Regulation CC, leverage ratio requirements, stress tests, long-term debt requirements and more. The overall goal is to remove unnecessary regulatory burdens, “a priority shared by both regulators and the banking industry.”
The recommendations “point to a broader underlying issue,” ABA said. “We encourage the agencies to use the examples below to identify broader rules and requirements that hinder, rather than help, banks in effectively serving their customers.”
