The American Bankers Association today said it supports a proposal by the Office of the Comptroller of the Currency to revise licensing requirements for community banks as part of a broader effort to reduce the overall regulatory burden on the institutions.
The OCC announced the proposed amendments last year as part of a package of reforms aimed at boosting community banks. Specifically, the agency is proposing to provide expedited or reduced filing procedures for any institution with less than $30 billion in assets, as long as it meets certain other requirements.
In a letter, ABA called the proposed amendments a thoughtful approach to tailoring regulation based on risk and complexity.
“Community banks… engage in activities that pose significantly lower systemic risk compared to larger, more complex institutions,” ABA said. “By extending expedited and reduced filing procedures to these banks, the OCC acknowledges that a one-size-fits-all regulatory model is neither efficient nor necessary.”
ABA also recommended the agency index the $30 billion to nominal GDP to ensure the threshold remains meaningful over time.
“Regulatory thresholds that remain fixed in nominal terms inevitably erode in relevance as the economy grows, creating unintended consequences such as burdening institutions never meant to be captured, discouraging organic growth, and diluting supervisory resources,” ABA said.
