WASHINGTON Lawmakers debated draft legislation aimed at reducing duplicative or inconsistent bank regulations on Wednesday, though the bipartisan effort is already drawing some criticism from Democrats.
Reps. Shelley Moore Capito, R-W.Va., chairman of the House financial institutions subcommittee, and Gregory Meeks, D-N.Y., are poised to introduce a bill that would require the regulators to review existing rules to determine if there are problems with them.
"Our draft seeks to address an issue that's been highlighted by nearly every community bank and credit union witness that has testified in front of our committee this year the cumulative effect of layering new regulations on top of old regulations," said Capito during a hearing on several regulatory relief measures. "Each agency would be required to identify if a proposed rule or order is in conflict with or inconsistent or duplicative of existing federal regulations or orders as they develop the proposed rule."
Witnesses testifying on behalf of industry groups endorsed the measure.
"It is not one new bill, but the complete effect of all regulatory changes, which challenge credit unions, especially small credit unions like mine," said Rose Bartolomucci, president and chief executive of Towpath Credit Union in Akron, Ohio, and a former state regulator, testifying on behalf of the Credit Union National Association.
Thomas Richards, assistant vice president at Owingsville Banking Company in Owingsville, Kentucky, who represented the American Bankers Association, also voiced support, adding that the legislation could be further developed to address situations where new rules overlap with each other.
"We suggest the bill's scope be expanded to enable regulators to address instances where a targeted rule may have created an unintended compliance obligation and also cover instances where a new regulation overlaps with other new regulations, not just existing regulations," he said.
Still, the draft legislation came under fire from several Democrats, including Rep. Maxine Waters, D-Calif., the banking panel's ranking member.
"The draft is overreaching and I do think that we can come together around specificities and talk about the regulations that we want to modify, change and delete," she said, arguing the committee should instead work on a comprehensive regulatory reform bill rather than piecemeal efforts.
Rep. Stephen Lynch, D-Mass., had even stronger words for the proposal, calling it "a terrible bill."
"I have to say, we've seen some bad legislation in this committee but this is a doozey," he said, arguing that the bill is designed to slow down the regulatory process. "I think that the purpose here is to gum up the works so that, in the case of the Consumer Financial Protection Bureau, they cannot protect consumers."
Formal legislation could be introduced as early as this month, a Capito spokeswoman said.