PYMNTS MonitorEdge May 2024

Bill Raising Asset Thresholds for Banking Regulations Heads to House Vote

The House Financial Services Committee (HFSC) voted Thursday (May 16) to advance a bill that would raise the asset thresholds for several regulations covering banks from $10 billion to $50 billion.

The Bank Resilience and Regulatory Improvement Act (H.R. 8337) will now move to the full House for consideration, the HFSC said in a Thursday press release.

The bill would raise the asset thresholds for bureau supervision under the Consumer Financial Protection Act of 2010, the Durbin Amendment requirements, the Volker Rule requirements, qualified mortgage requirements under the Truth in Lending Act, and leverage and risk-based capital requirements under the Economic Growth, Regulatory Relief and Consumer Protection Act, according to the bill’s text.

The HFSC said in its release that the bill would promote regulatory tailoring for community financial institutions, provide a more transparent and timely bank merger review process, and require more engagement and transparency regarding Federal Reserve stress testing.

The committee added that the bill will improve the bank supervisory appeals process, require the Federal Reserve to fix deficiencies in the discount window, and give small bank holding companies additional relief, per the release.

Rep. Andy Barr, who introduced the bill, said in remarks to the committee and shared in a video that the bill “will provide financial institutions with the relief needed to serve their communities and customers without the punitive regulatory and supervisory burdens that impede them from doing so currently.”

Before the HFSC held its markup of the bill, HFSC Chairman Patrick McHenry said in a Thursday press release: “Subcommittee Chairman Barr’s Bank Resilience and Regulatory Improvement Act will right-size overly burdensome regulations, put a strict timeline on the merger review process, and improve the supervisory appeals process. Additionally, it will take steps to enhance the operations of the Fed’s discount window, which is critical after the banking turmoil we saw last year.”

The Independent Community Bankers of America (ICBA) commended the committee members for advancing the bill, saying in a Thursday press release that the bill supports community banks and the communities they serve.

ICBA said the bill “would raise the asset exemption thresholds of five burdensome regulatory provisions, including the Durbin Amendment and Consumer Financial Protection Bureau supervision, to support tiered regulation.”

America’s Credit Unions said in a Thursday letter that it supports the bill’s “overall goal” of reducing regulatory burden and urged members of the committee to advance it.

“We also strongly encourage the NCUA [National Credit Union Administration] to consider using its existing authority to match the spirit of capital relief afforded to banks through the bill’s adjustment to the community bank leverage ratio (CBLR) eligibility threshold,” Jim Nussle, the organization’s president and CEO, wrote in the letter.