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Bill to Tailor Regulatory Relief to Fit Risk Profiles of Small FIs
Tuesday, June 30, 2015 6:35 AM

A bill introduced last week by Rep. Scott Tipton (R-CO) aims to provide regulatory relief for credit unions and community banks. The Taking Account of Institutions with Low Operation Risk (TAILOR) Act (H.R. 2986) would require federal regulatory agencies to shape regulations to fit the risk profile and business model of institutions.

“Banks and credit unions are currently regulated under a one-size-fits-all approach regardless of size or risk profile," said Tipton. "As a result, regulations designed and intended for big banks are also applied to small community and independent banks or credit unions. Regulations should be tailored to meet the risk profile and business model of specific institutions to prevent unnecessary costs and burdens to those institutions, while ensuring that government regulators are able to better focus their resources to provide oversight and ensure a safe and reliable financial marketplace.”

Specifically, the bill would require:

  • That the National Credit Union Administration, and other federal regulators tailor regulatory action occurring after enactment to appropriately apply to credit unions and community banks;
     
  • That federal financial regulatory agencies consider the risk profile and business model of the institutions and determine the necessity, appropriateness and impact of applying such regulatory action to those institutions;
     
  • The five regulatory agencies to individually report in person and testify to the House Committee on Financial Services and the Senate Banking Committee annually on the specific actions taken to tailor the agency’s regulatory actions as required by the bill; and
     
  • That, within three years of enactment, the five federal regulatory agencies review all regulations adopted over the five years prior to enactment and apply the requirements of this bill to such regulations.