WASHINGTON - Key House and Senate banking committee members introduced legislation Thursday that would exempt small banks from Community Reinvestment Act examinations, scale back Truth-in-Savings, and limit other regulations that frustrate bankers.
The bills, introduced by Rep. Doug Bereuter, R-Neb. and Sens. Richard Shelby, R-Ala., and Connie Mack, R-Fla., are given good prospects of passing in the Republican Congress.
"Three years ago, people were saying 'not in a million years' when talking about regulatory relief for banks," said Donald G. Ogilvie, executive vice president of the American Bankers Association.
"Now, right on the heels of last year's success, another 60 red-tape- relief provisions have been dropped in the hopper," he said. "It's clear the odds have changed."
Details of the major provisions in the bills had filtered out of both committees over the past several months. The bills, which differ slightly, would exempt small banks from CRA examinations.
The Shelby-Mack bill would exempt banks with assets of less than $250 million from CRA, while the Bereuter bill would exempt banks with less that $100 million in assets located in communities of fewer than 30,000 people.
However, Rep. Bereuter's bill would also allow banks under $250 million in assets to "self-certify" that they are in compliance with CRA.
Additionally, the Senate bill would prohibit race and gender data collection, which is contained in a controversial provision in the revised CRA regulations that federal banking regulators are expected to finalize as early as mid-April.
"We've been talking to the regulators about this, but they are not necessarily in agreement with all of it," said a Senate Banking Committee staffer.
Among many other things, both bills also contain provisions to scale back the Truth in Savings Act and eliminate reporting overlaps in the Fair Credit Reporting Act and Equal Credit Reporting Act.
The Bereuter bill also contains a provision that would clarify lenders' liability for environmental contamination of property held as security for a loan. The Senate version does not currently contain a similar provision.
Senate Banking Committee Chairman Alfonse M. D'Amato, a co-sponsor of the Shelby-Mack bill, said he envisioned reporting the bill out of his committee to the Senate floor in the "latter part of April or early May."
"The leadership in both houses is eager for this kind of legislation where we are going to be cutting down the size ... of government regulations," the New York Republican said.
Rep. Bereuter hinted that his bill may be attached to a Glass-Steagall bill.
"There is so much support for this in the Republican party and substantial support in the Democratic party as well, that ... there are already people talking about adding it to the Glass-Steagall bill, and on that I have no comment at this point," Rep. Bereuter said.
However, an industry source said that, since the Bereuter bill is strongly supported by House leadership, "the best strategy is to have this bill move quickly, and by itself."