Banking regulators held the fifth and final of their Bankers Outreach Meetings in New York on regulatory burden. The meetings have been part of a general review by the banking agencies pursuant to EGRPRA, the law that requires them to review their regulations once every ten years with an eye to eliminating those that are outdated, unnecessary or unduly burdensome. Many community bankers from New York and the northeast attended as well as federal and state regulators including FDIC Vice Chairman John Reich (who is leading the effort for the agencies), Comptroller of the Currency John Hawke, and New York Superintendent Diana Taylor.
Community bankers at the meeting effectively described the huge regulatory burden facing their banks and their concerns about the examination process. Many complained about the costs of regulation and its disproportionate impact on smaller banks. Their suggestions for reducing regulation included: eliminating the annual privacy notice under Regulation P; allowing customers to waive the right of rescission and eliminating it altogether for large loans; raising the threshold for CTR filings from $10,000 to $30,000; reducing or eliminating the Patriot Act record retention requirements for closed accounts; reducing the Sarbanes-Oxley Act requirements; and tailoring regulations and the examination process to the size and risk of the bank.
Vice Chairman Reich said that next steps in the EGRPRA process include meeting with consumer groups in November, and further discussion among the regulators on which issues to submit to lawmakers with recommendations for change. Reich is hopeful that House and Senate committees will hold hearings early next year on reducing regulatory burden and that bankers will have the opportunity to testify. ICBA will continue to monitor the process closely and weigh in since regulatory burden is one of the greatest challenges facing community bankers.