The regulatory environment could be looking brighter for New York Community Bancorp as it is poised to cross an important regulatory threshold.
Regulators, including Federal Reserve Gov. Daniel Tarullo, have indicated they are open to "lessening some of the burdens based on their existing regulatory authority," Joseph Ficalora, New York Community’s chief executive, said during a conference call on Wednesday to discuss third-quarter results.
This could prove beneficial to the $49.5 billion-asset bank. New York Community, in Westbury, N.Y., is currently poised to cross over $50 billion of assets once regulators approve its deal to buy Astoria Financial. Banks are generally considered "systemically important financial institutions" once they cross $50 billion, a designation that comes with heightened regulatory scrutiny.
However, Ficalora noted that it would take action by Congress to actually increase the $50 billion-asset threshold.
Ficalora also noted that the results of the presidential election could influence how his company is regulated.
"If the changes go in one direction, there is a good likelihood that some changes with regard to $50 billion might occur next year," he said during the call. "If the government changes in the opposite direction then there is no likelihood that there will be a positive change."
Ficalora didn’t specify which candidate — either the Democratic nominee, former Secretary of State Hillary Clinton, or the Republican contender, real estate tycoon Donald Trump, — would be more beneficial. But he was still overall optimistic about the year ahead.
"The reality is that the year ahead is going to be filled with many, many possibilities, some of which will be very, very favorable," Ficalora said. "It does not seem as though there are any that would be more adverse than what we already have today."