In a comment letter to the four federal banking agencies, the ICBA applauded their effort to review the full range of bank regulations with an eye to reducing regulatory burden as much needed and greatly welcomed. "The volume of regulatory requirements facing the banking industry today presents a daunting task for any institution, but severely saps the resources of community banks," said the ICBA.
The ICBA provided its comments on two of the first three categories of regulations being reviewed — applications and reporting, and powers and activities (the other was international operations)-under a mandate issued by Congress in the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA). The review of all bank regulations must be completed by 2006. Additional information is available at www.icba.org and a special Web site created by the banking agencies, www.egrpra.gov.
The ICBA offered several suggestions to facilitate the process. Because bankers have identified consumer protection and disclosure requirements as the greatest burden, the ICBA recommended those regulations be considered in smaller groupings rather than all together in order to better enable bankers to comment. In addition, the agencies should hold focus group meetings with consumers to ensure that mandated disclosures are useful and understandable. It was also suggested that the agencies continue to meet with bankers to discuss regulatory burden; the last meeting currently scheduled will be in New York on October 15.
The ICBA also offered several recommendations for specific changes, such as increasing the size of banks eligible for small bank holding company treatment from $150 million (a figure not changed since 1972) to $1 billion; eliminating newspaper advertising requirements for applications and notices filed with the Federal Reserve; creating a task force to review the data collected under the Call Report; and expanding the OCC's pilot program on lending limits to include agricultural loans.
In closing, the ICBA stated that the process of regulatory review must be an ongoing and dynamic process, incorporated into every aspect of rulemaking and regulation review. The ICBA comments are posted at www.icba.org.