Calls to cease non-coronavirus rulemaking grow louder
WASHINGTON — Community bankers are calling for a six-month halt in rulemaking except for regulations dealing with the coronavirus outbreak.
In a March 30 letter, Independent Community Bankers of America CEO Rebeca Romero Rainey urged the heads of several financial regulators to suspend non-COVID-19-related rules to allow banks to focus on the fallout from the pandemic.
“Combating the COVID-19 crisis demands the full attention and all available resources from the public, from state, local, and federal government entities, as well as all industries, including the vital financial services industry,” Rainey wrote to seven agencies. “Not only are financial institutions impacted, but the voices of those institutions are also engaged in this all hands-on deck reality.”
“The resources required to effectively respond and advocate positions during the rulemaking process have understandably shifted to responding to this crisis,” Rainey added.
The trade group joined community groups and lawmakers who have made similar requests.
Last week, the National Community Reinvestment Coalition and National Alliance of Community Economic Development Associations separately called on the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency to suspend their rulemaking process for proposed reforms to the Community Reinvestment Act. Public comments for that proposal are due April 8.
“This grave pandemic demands a comprehensive and all-encompassing response. The health and wellbeing of our fellow citizens and residents are at stake,” the NCRC wrote. “The undersigned organizations must immediately drop all policy-related matters and help their clients and communities with basic survival.”
In its letter, the economic development group alliance wrote that “as our networks begin to address the dire public health and economic situations playing out in our communities nationwide, we felt an urgent need to double down on our request that you immediately suspend the rulemaking process.”
Similarly, the California Reinvestment Coalition is preparing to submit a letter to the OCC and FDIC signed by its members arguing that enforcing the April 8 deadline for comments on the CRA proposal "will not at all reflect the unknown needs of low and moderate income communities in a new post COVID-19 America."
"Accordingly, the public record on which you will be basing your decisions will be incomplete and inadequate,” the CRC letter says.
Earlier in March, Sen. Sherrod Brown, D-Ohio, the ranking member on the Banking Committee, said comment periods closing after March 1 should be suspended or extended by at least 45 days. "In light of this crisis, we urge you to implement an immediate moratorium on rulemakings not related to the virus response or other imminent health and safety concerns,” Brown wrote.
Rainey's letter cited several pending rulemakings, including CRA reform as well as a plan by the FDIC to reform restrictions on brokered deposits.
Community advocates have pointed to a number of regulators that quickly chose to suspend significant rulemakings, including the Federal Housing Finance Agency's indicating recently that it will likely delay plans to create a post-conservatorship risk-based capital system for the government-sponsored enterprises.
But so far, the agencies have made no indication they will allow for a broad suspension of rulemaking, including on CRA reform.
“The OCC is operating and conducting normal business including rulemakings,” an agency spokesperson wrote in an email.