The president of the St. Louis Fed said that regulators should go back to the pre-Dodd Frank framework for small banks, while warning about changes to the system as fintechs expand their presence.
The current regulatory focus drives the growth of ever-larger, harder-to-manage and harder-to-regulate megabanks, while community banks have been left to be picked up by acquirers.
Senate lawmakers will soon introduce a bill that could more than quadruple the current $50 billion threshold to be considered a systemically important bank, a top Trump administration official said Monday.
The bills were individual pieces of the larger Financial Choice Act, including measures to raise the systemic threshold for banks and raise the threshold for banks subject to CFPB supervision.
The Consumer Financial Protection Bureau was created in part to ensure that nonbanks are subject to federal oversight, but the fact is that 99% of banks are exempt from CFPB supervision.
Cynthia Blankenship, an executive at Bank of the West in Grapevine, Texas, has been a regular in Washington for years fighting for regulatory changes. She is encouraging other bankers to do likewise.
Under the bill, regional banks may eventually be able to shed the systemically important financial institution designation that subjects those with more than $50 billion in assets to tougher regulatory requirements.
Lawmakers may feel differently about some elements in a Senate regulatory relief bill depending on whether CFPB Director Cordray is remaining in office until his term expires in July.
The Trump administration is prepping recommendations to address shortcomings in the capital markets in a report to be released next month, a top Treasury Department official said Monday.
The need to raise the U.S. debt limit, pass a budget, provide relief for victims of Hurricane Harvey and enact flood insurance and tax reform will dominate the remaining legislative calendar this fall.
