ICBA Legislative and Regulatory Successes 2006-2015
For a full list of ICBA's Legislative and Regulatory Successes from 2006-2015, download the PDF file below:
Recent Legislative & Regulatory Successes — Fourth Quarter 2017
Regulatory Relief Legislation Advances.
The 115th Congress is off to a strong start in advancing meaningful community bank regulatory relief legislation. On June 8, the House passed the Choice Act (H.R. 10), a comprehensive reform bill containing about two dozen community bank regulatory relief provisions from ICBA’s Plan for Prosperity. In addition, dozens of regulatory relief bills have been introduced, including the Clear Relief Act, a bill crafted in close consultation with ICBA, which has both House (H.R. 2133) and Senate (S. 1002) versions.
Treasury Report Reflects ICBA Influence.
The Treasury Department’s June 2017 report, “A Financial System that Creates Economic Opportunities,” draws significantly from ICBA’s Plan for Prosperity, an ICBA-led community banker meeting with Treasury officials in April, and ICBA’s white paper, “Community Bank Regulatory Relief: A Roadmap to Economic Growth and Prosperity.” The Treasury report contains legislative recommendations as well as numerous administrative provisions that could be enacted without congressional action.
Agencies Pause Certain Basel III Rules, Propose Capital Simplification.
In August, the federal banking agencies announced a pause in the phase-in of regulatory capital deductions and risk weights for mortgage-servicing rights, certain deferred tax assets and certain investments in other banks. These provisions were scheduled to be fully phased in in January 2018. In September, the agencies proposed raising the capital threshold deduction from 10% to 25% for the assets listed above. However, ICBA is concerned with proposed changes to the definition of a high volatility commercial real estate (HVCRE) loan (See Current Top Issues). ICBA has been a leading advocate for Basel III relief for community banks.
Treasury Withdraws Adverse Estate Planning Proposal.
In October, Treasury withdrew an Obama proposal that would have disallowed the use of well-established estate planning techniques for the transfer of family-owned businesses, increasing estate tax liability by as much as 35 percent. ICBA highlighted the adverse impact of this proposal on community banks and urged its withdrawal.
Small Dollar Loan Rule Includes ICBA-Backed Exemption.
In October, the CFPB released its final payday, vehicle title and certain high-cost installment loan rule. As advocated by ICBA, the final rule exempts from the onerous full-payment test and the principal-payoff option lenders that make 2,500 or fewer covered short-term or balloon-payment small-dollar loans per year and derive no more than 10 percent of their receipts from such loans.
FASB Heeds Community Bank Outcry, Significantly Modifying CECL.
Following a multi-year advocacy campaign, ICBA and community banks won significant changes in the Financial Accounting Standards Board’s (FASB’s) final standard on current expected credit losses (CECL). In a previous draft, community banks would have been required to use complex cash flow modeling to determine loan reserves. The final standard will allow community banks to rely on their judgment, knowledge of local economic conditions, and currently-used systems and tools, such as spreadsheets, to determine reserves. ICBA will follow through on this important victory by ensuring that regulators and auditors charged with implementing CECL honor these revisions.
FDIC Favorably Revises Assessment Rules.
As a result of ICBA’s advocacy, the FDIC scrapped the core deposit ratio as a financial measure for determining deposit insurance assessments of banks with assets less than $10 billion, substituting the brokered deposit ratio. Reciprocal deposits are treated as core deposits, as they are under current rules. Only brokered deposits in excess of 10 percent of total assets will impact assessment rates. Also, the one-year asset growth measure was changed so that only asset growth greater than 10 percent will impact assessment rates.
FFIEC Updates Cybersecurity Assessment Tool (“CAT”).
As a result of ICBA and community bank advocacy, the Federal Financial Institutions Examination Council updated the CAT to give more recognition to community bank efforts to secure their institutions against cyber threats.
Supreme Court Rules Favorably in Fair Lending Suits.
The U.S. Supreme Court upheld an ICBA-supported lower court ruling that found that spouses who guarantee bank loans cannot bring discrimination claims against creditors under the Equal Credit Opportunity Act. A separate Supreme Court decision significantly limits the application of disparate impact in fair housing cases.
FDIC Lowers Hurdle to De Novo Formation.
The FDIC announced that it will reduce from seven to three years the period of heightened supervisory monitoring of newly formed, or de novo, banks. This lower regulatory hurdle will help facilitate de novo formation.
NACHA Same Day ACH Rule Becomes Effective.
In September 2016, Phase 1 of NACHA’s Same Day ACH rule went into effect, allowing for the sending and receiving of virtually any ACH credit transaction. Although sending same day transactions by financial institutions and their customers is optional, NACHA expects that many will begin enabling the origination of same day payments. ICBA’s advocacy, including our 2013 white paper, “Same Day ACH: An Opportunity for Leadership,” was instrumental in building support for the NACHA and Federal Reserve Board final rules.