While the regulatory landscape is looking better and brighter for the banking industry, the American Bankers Association is working hard to ensure the durability of recent changes so they can survive future changes in the nation’s leadership, ABA President and CEO Rob Nichols told attendees today at the Risk and Compliance Conference in Charlotte, North Carolina.
The Trump administration has rolled back or reserved many of the regulatory pushes of the Biden administration. Nichols said many of those changes have been positive, but he also acknowledged banker concerns about whether the regulatory pendulum will swing back with the potential change in administration in the coming years, “making decisions to recalibrate operations, controls and staffing even more challenging.”
One way to cement regulatory change is to codify it through legislation, and ABA takes “a militantly bipartisan approach” to its advocacy, Nichols said. He pointed to ABA’s advocacy on market structure legislation for cryptocurrency that is currently before Congress, as well as the association’s push for reform of the Consumer Financial Protection Bureau.
“At ABA, we have long believed that the bureau should be governed by a bipartisan commission and subject to congressional appropriations,” he said.
Another way to enact lasting reforms is through legal precedent. Nichols pointed to a lawsuit by ABA and others against an Illinois law preventing banks and other entities from charging or receiving interchange fees on the portion of a debit or credit card transaction attributable to tax or gratuity.
“Baked into that challenge is the need to defend the National Bank Act and federal preemption, which has been a fundamental tenet of our banking system since the time of Abraham Lincoln,” he said. “As states step up their individual regulatory pushes, it is imperative that we protect federal preemption, and we were very pleased to see the [Office of the Comptroller of the Currency] conclude that federal law clearly preempts the Illinois law and reaffirm National Bank [Act] powers. The OCC’s actions further strengthen our already strong case.”
