U.S. Sen. Mike Rounds (R-SD) recently sponsored legislation that would require federal regulatory agencies to take into consideration the risk profiles and business models of individual financial institutions and shape those regulations accordingly.
“This bill 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 bureaucratic paperwork,” Sen. Rounds said. “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.”
On Feb. 9, Sen. Rounds introduced the Taking Account of Institutions with Low Operation Risk (TAILOR) Act of 2023, S. 362, alongside four GOP original cosponsors, including U.S. Sens. Thom Tillis (R-NC) and Steve Daines (R-MT), all members of the U.S. Senate Banking, Housing, and Urban Affairs Committee.
If enacted, S. 362 would apply to the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Consumer Financial Protection Bureau, according to the text of the bill.
Each would have to take into consideration the risk profile and business models of each type of institution or class of institutions subject to a certain regulatory action, and then tailor the regulatory action “in a manner that limits the regulatory impact, including cost, human resource allocation, and other burdens, on the institution or type of institution as is appropriate for the risk profile and business model involved,” the text says.
Additionally, S. 362 would direct regulatory agencies to reduce burdensome reporting requirements for community banks, among other provisions.
“Financial institutions across South Dakota have been negatively impacted by burdensome, unnecessary regulations due to disproportionate compliance costs,” said Sen. Rounds. “These costs are ultimately passed down to consumers.”
The bill has garnered support from the Independent Community Bankers of America and has been referred for consideration to the Senate Banking, Housing, and Urban Affairs Committee.