House clears financial regulatory relief bill
By Kristin Roberts
WASHINGTON (Reuters) – The U.S. House on Wednesday approved
a bill that aims to ease oversight of the financial services
industry by eliminating what are seen as redundant and outdated
requirements imposed by current federal regulations.
The sweeping legislation, supported by both the financial
industry and U.S. regulators, also cuts back on compliance
requirements under federal anti-money laundering laws, reducing
the number of filings that banks will be forced to make.
Similar legislation has not yet been introduced in the
Senate, although the Senate Banking Committee last week held a
hearing on regulatory relief.
“The Financial Services Regulatory Relief Act is a
bipartisan piece of legislation that will significantly reduce
the amount of time financial institutions spend filling out
paperwork to send to bureaucrats in Washington, D.C.,” said
Texas Republican Rep. Jeb Hensarling.
“Excessive regulation not only hampers competition, it
limits choices for consumers, stifles innovation, and restricts
opportunities for financial institutions to serve their
communities,” he said.
The House bill includes a host of provisions affecting
banks, credit unions, savings associations and the Federal Home
Loan Bank system.
Among those, it would reduce the number of cash transaction
reports that banks must file under the Bank Secrecy Act by
allowing for exemptions for some qualified customers.
The industry and regulators have said many of the reports
now being filed are not relevant to the detection of financial
crimes, including money laundering and terrorist financing.
But, according to sources, federal law enforcement officials
had reservations about changing the reporting requirement.
Fred Becker, president of the National Association of
Federal Credit Unions, called the House legislation the
“strongest relief bill yet,” citing specifically the eased Bank
Secrecy Act requirements.
“Today’s House action is testament to the growing
realization by lawmakers that financial institutions need
regulatory relief in order to grow and provide the services
their members and customers have come to expect in a highly
competitive marketplace,” Becker said.
The legislation also would increase to $1 billion from $250
million the asset threshold that qualifies small banks to be
examined on an 18-month cycle rather than annually. That would
shift about 340 more national banks to the longer evaluation
cycle, according to the Office of the Comptroller of the
Currency, a national bank regulator.
The bill would allow interstate bank mergers between
insured banks with different home states.
It also would amend the Federal Home Loan Bank Act to allow
some privately insured credit unions to become members of a
Federal Home Loan Bank. The system of 12 Federal Home Loan
Banks was created by Congress to provide funding for housing
and community development.