ICBA called on federal banking regulators in the Trump administration to continue advancing ICBA’s deregulatory recommendations via the latest Economic Growth and Regulatory Paperwork Reduction Act review.
Details: In a letter to the FDIC, Federal Reserve, and OCC under the latest EGRPRA comment period, ICBA recommended ways the agencies can reduce regulatory burdens on community banks, including:
Reg CC: Remove next-day availability for government checks, extend holds for fraud prevention, and clarify liability rules.
Reg II: Withdraw the Fed’s 2023 proposal to lower debit card interchange caps.
Reg S: Update outdated reimbursement rates, adjust for inflation, and narrow exceptions.
Community Reinvestment Act: Repeal the 2023 CRA rule and return to the 1995 framework with higher asset thresholds and clearer qualifying activities.
Community Bank Leverage Ratio: Lower the ratio from 9% to 8% to support lending and simplify compliance.
Basel III: Exempt community banks from Basel III, and reduce complexity and costs.
Mortgage Servicing: Raise limits on servicing assets and lower risk weights to encourage local servicing.
Subchapter S Banks: Allow dividend distributions for tax payments despite capital buffer.
Stress Testing and Systemic Risk: Maintain strong stress testing for large banks; avoid weakening safeguards.
Mutual Capital Certificates: Create clear guidelines for MCCs as Tier 1 capital and simplify the approval process.
Background: EGRPRA requires the federal banking agencies to review their regulations every 10 years to identify outdated, unnecessary, or unduly burdensome regulations, allowing community bankers to articulate concerns with regulatory burden and its impact on local communities.