As Richard K. Davis sees it, the biggest remaining regulatory costs might be bottles of Tylenol for the compliance team.
Though the Volcker Rule and other Dodd-Frank Act regulations are still being finalized, the outstanding risks will be manageable if not clerical, the chairman and chief executive of U.S. Bancorp (USB) said.
"I don't think there is a hidden trap door of any significance that we can't at least predict or work within as the next couple of years go forward," Davis said.
"As it relates to the financial impacts … substantially most of that has already been seen by those other activities of Reg E and Durbin and CARD Act and things like that," he said. "Probably 65% of Dodd-Frank will touch our company and a big majority of it is going to be more paperwork transactions and managing the details, but not the financials."
He was responding, during a conference call, to analysts' questions about what kind of additional regulation he and his colleagues anticipate. U.S. Bancorp, with $340 billion of assets, on Tuesday reported earnings of $1.34 billion in the first quarter on strong loan and revenue growth.
Davis said he does not expect major changes from the Consumer Financial Protection Bureau.
"They haven't done anything … yet to pick an argument with, and we will watch and see how they perform," Davis said. If the agency sticks to its "original true goal of being transparent, clear and helping customers understand what they bought, we are going to be in great shape there."
That, of course, could change. And if it does, the company will find a way to handle the problem.
"If they get into things like price-fixing and things like that, then we will deal with that when we face it, and it will affect everybody and as usual probably affect us less," Davis said. "For now, I think we're, as a management team, keeping our eye on so many things, but not sitting here worrying about the peril that it will create for the investment that you guys have in our company. And if it's a deal, we will manage it like we have before and we will find an offset."
U.S. Bancorp has built its young capital markets division with the pending Volcker Rule's limits on proprietary trading and some investments in mind, Davis said.
Davis has said frequently that the company is looking to offset half of the revenue lost by the CARD Act, Reg E and the Durbin Rule by yearend.
Andrew Cecere, the chief financial officer, said on the call that the most important regulatory unknown is the leverage coverage ratio guidance from Basel III.
"We have built a lot of liquidity on the balance sheet and whatever those final ratios are will guide us to whatever we finalize from the securities portfolio, but that would be the only other one I could think of," Cecere said.