WASHINGTON - With all the hoopla surrounding congressional efforts to restrict bank insurance powers, provisions paring back bank regulations have been ignored lately.
The main provisions of the regulatory relief bills currently making their way through Congress, would:
*Shift responsibility for enforcing the Real Estate Settlement Procedures Act to the Federal Reserve from the Department of Housing and Urban Development. HUD would retain authority over rules prohibiting kickbacks and unearned fees.
*Protect banks from being sued by customers in Truth-in-Savings disputes. Also, the House bill would no longer require banks to disclose annual percentage yield or send periodic statements.
*Amend Truth-in-Lending laws to allow lenders to provide consumers considering adjustable rate mortgages with either a historical example or a statement saying that the monthly payment may increase or decrease because of the fluctuating rate.
*Increase the threshold for Home Mortgage Disclosure Act reporting to $50 million of assets from $10 million. The Fed could exempt larger banks if the burden of compliance outweighs the information's worth. Disclosure act data could be requested in writing from a bank's headquarters, rather than verbally at each branch.
*Eliminate liability for failure to disclose finance charges related to mortgages, or other numerical disclosures, as long as the charges are either understated only slightly, or overstated. Also removes liability for using the wrong form to notify a consumer of his or her rights to rescind the loan.
*Remove federally chartered banks' 5% cap on assets invested in student loans. Doubles cap on commercial loans to 20%, assuming that loans over 10% would be invested in small business.
*Lengthen the period between exams for smaller banks to two years and raise the asset ceiling to $250 million; currently banks with less than $175 million in assets are examined every 18 months.
*Allow banks to earn qualified-lender status by passing either the qualified thrift lender test or the tax test, not both as is currently required. Permit the counting of credit card, small-business, and student loans in the qualified thrift lender test.
*Repeal rules requiring independent auditors to attest to bank compliance with safety and soundness regulations and internal controls. Allows internal audit committees to have a majority of outside directors on them, rather than consisting solely of outsiders.
*Protect internal testing results from use in lawsuits.
*Eliminate the need to give prior notice of decisions to close ATMs, branches within 2.5 miles or in the same neighborhood of another branch of the same bank, or those closed due to an emergency.
*Eliminate rules that require institutions to produce unnecessary internal written policies, and require banking agencies to review their rules at least every 10 years to identify outdated and unnecessary regulations.