The Federal Reserve Board should continue to focus on emerging systemic threats and work on exempting community banks from rules clearly aimed at larger institutions, said Fed Gov. Daniel Tarullo, who unexpectedly announced his pending departure Friday.
Purported revisions to House Republicans' Dodd-Frank rollback bill raised immediate questions about the GOP's strategy, since the provisions — which were more extreme than when the bill was unveiled last year — immediately sparked Democratic opposition.
A House plan to provide regulatory relief will be more far-reaching when it is reintroduced soon by rendering the consumer protection agency toothless and providing banks with extra incentives to opt into a deregulatory plan.
The Consumer Bankers Association says the “whipsaw effect” of having a single director who can quickly tack the CFPB in one direction or another can make it challenging to plan out budget expenditures and determine which products and services they should invest in and offer.
In reality, the Financial Choice Act has appeal for both those who want to unwind the Dodd-Frank Act and regulatory hawks who want to keep banks in check.
The prospects for significant reform of the Dodd-Frank Act appear to be cratering as the political dynamic on Capitol Hill has quickly deteriorated in the wake of controversial executive orders by President Donald J. Trump.
President Trump's order to eliminate two regulations for every new one does not apply to financial institution regulators, but may affect banks and credit unions in other ways.
By cutting back on paperwork requirements and regulatory red tape, policymakers can unleash the power of community banks to spur lending and economic growth.
On earnings calls this week CEOs expressed optimism for increased loan demand, a softer tone from regulators, a higher SIFI threshold and, potentially, a surge of interest in health savings accounts.
