WASHINGTON — The House Financial Services Committee will hold a vote Wednesday on a credit union-backed bill that would provide regulatory relief for financial institutions that are not considered systemically important.
The Taking Account of Institutions with Low Operation Risk Act (TAILOR Act) was introduced by Scott Tipton, R-Colo., in June and now has 59 cosponsors, including two Democrats.
The bill would require federal bank and credit union regulators, including the Consumer Financial Protection Bureau, to consider an institution's business model and potential unintended consequences when implementing new regulations. It would also require regulators to do a five-year look-back on past regulations and report annually to the House Financial Services Committee and the Senate Banking Committee on steps that are being taken to "tailor" regulations.
Both NAFCU and CUNA said they support the bill.
"This is an important piece of legislation because it continues this notion that we've been trying to push, that in coming out of the financial crisis you have consumer regulations that are certainly targeted toward abusers of consumers, but you also have prudential regulation that is designed to address 'too big to fail,'" said Ryan Donovan, CUNA's chief advocacy officer. "Credit unions aren't 'too big to fail', and they shouldn't be subject to the same type of 'too big to fail' regulations that the largest banks are."
Bankers have also expressed support for the measure.
"It is clear that legislation is needed to address the mounting burdens of regulation that, in the aggregate, have stifled the ability of our nation's financial institutions to serve the needs of consumers and small businesses, as well as local and regional economies," wrote James Ballentine, an executive vice president at the American Bankers Association, in a letter to committee members on Tuesday.
The vote is schedule for Mar. 2 at 10 a.m. Eastern Time.
