WASHNGTON—While credit unions responded by saying there is work still left to be done following a new report related to the burden of federal regulations and paperwork, a bankers’ group has blasted it, charging that federal regulators have “failed” at providing any relief.
At issue is a joint report to Congress from the agencies that are part of the Federal Financial Institutions Examination Council (FFIEC), of which NCUA is a member, that details their review of rules affecting financial institutions.
The review was conducted as part of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, and in conjunction with the National Credit Union Administration.
NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt said there is still work to be done.
"The total regulatory burden on credit unions is at an all-time high. While it is encouraging to see regulators admit that there are opportunities to address outdated and unnecessary regulations, these acknowledgements should be coupled with action," said Hunt. "In particular, the NCUA portion of the report includes a number of key areas where NAFCU has sought reform. We look forward to continuing to work with NCUA and other regulators to address the problem of regulatory burden."
But the Independent Community Bankers of America (ICBA) was far more outspoken, with its CEO, Camden R. Fine, releasing a statement that said, “ICBA is deeply disappointed” by the report, “in which the federal banking agencies have failed to address the overregulation of community banks that is harming local communities. The nation’s community banks strongly support targeted regulatory relief for community banks and their customers, but far more substantive relief is needed to promote lending and economic growth.
“Today’s report falls far short of making the substantial impact on regulatory burden that ICBA has advocated in several comment letters and meetings since this EGRPRA review launched nearly three years ago,” Fine continued. “Regulators have said at these meetings that if they don’t advance real and substantive relief under this EGRPRA review, then they will have failed. Today’s report clearly shows that they have. The EGRPRA mandate requires the agencies to thoroughly review each regulation and eliminate those that are outdated, unnecessary or unduly burdensome. While today’s report rightfully proposes simpler capital rules and relief from appraisal requirements, much of the report simply recaps initiatives already required by Congress.”
EGRPRA requires the federal banking agencies, along with the FFIEC, to conduct a review of their rules at least every 10 years to identify outdated or unnecessary regulations. While NCUA is not required to participate in the EGRPRA review, the agency’s board chose to participate to enhance its own regulatory review process, NCUA stated.
In particular, the agencies said in a statement that their review focused on the effect of regulations on smaller institutions, such as community banks and savings associations. The federal banking agencies said they published four requests for written comment in the Federal Register and hosted six public outreach meetings across the country. NCUA added that it routinely conducts town-hall meetings, listening sessions, and other outreach activities to hear and discuss stakeholders' views.
Altogether, the agencies said they received more than 250 comment letters from financial institutions, trade associations, and consumer and community groups, as well as numerous comments obtained at the outreach meetings, the agencies reported.
The report describes several joint actions planned or taken by the federal financial institutions regulators, including:
- Simplifying regulatory capital rules for community banks and savings associations
- Streamlining reports of condition and income (Call Reports)
- Increasing the appraisal threshold for commercial real estate loans
- Expanding the number of institutions eligible for less frequent examination cycles
The report also describes the individual actions taken by each agency to update its own rules, eliminate unnecessary requirements, and streamline supervisory procedures.