U.S. Sens. Mike Rounds (R-SD) and Tim Scott (R-SC) on March 3 introduced legislation that would require federal financial regulatory agencies to take the risk profiles and business models of smaller financial institutions into account when crafting regulations.
“I look forward to working with my colleagues on this important legislation so our smaller financial institutions are better able to meet the needs of families and local businesses,” said Sen. Rounds, who sponsored the Taking Account of Institutions with Low Operation Risk (TAILOR) Act, S. 3745, with lead original cosponsors including Sen. Scott.
“By cutting red tape and changing regulators’ one-size-fits-all approach to rulemaking, the TAILOR Act will allow community banks and credit unions to better use their resources to impact the communities they serve,” Sen. Scott said. “Whether it’s providing mortgages, small business loans, or consumer credit, we need to make it easier for these local institutions to do business, create wealth, and spur economic growth.”
If enacted, S. 3745 would require federal agencies — including the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Consumer Financial Protection Bureau — to provide an annual report to Congress outlining the steps they have taken to adjust their regulations, as well as a report on the modernization of bank supervision, according to a bill summary provided by the lawmakers.
“Financial institutions across South Dakota have been negatively impacted by burdensome, unnecessary regulations due to disproportionate compliance costs,” Sen. Rounds said. “These costs are ultimately passed down to consumers. The TAILOR Act would ease the regulatory burden on smaller financial institutions so they can focus resources on taking care of their customers, rather than spending time and money on compliance.”
Additionally, S. 3745 would require regulators to conduct a review of all the regulations issued by the agencies since the 2010 passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the summary says, noting that if a review finds that the regulations do not conform to the TAILOR Act, then the agency would be required to revise them.
The bill, which is supported by the Independent Community Bankers of America, has been referred for consideration to the U.S. Senate Banking, Housing, and Urban Affairs Committee, on which Sens. Rounds and Scott serve.