Fed’s Bowman prioritizes outreach to community banks

Federal Reserve Vice Chair for Supervision Michelle Bowman said she continues to prioritize community bank outreach to ensure their voice is part of agency efforts to shape a new regulatory framework.

Details: Speaking at the Economic Growth and Regulatory Paperwork Reduction Act Outreach Meeting, Bowman said:

• Over time, some regulations have unduly restrained bank activities.

• Regulatory complexity is felt most acutely by community banks.

• When a regulatory system is not appropriately tailored to the size, risk, complexity, and business model of financial institutions, it impedes the effectiveness of their operations.

• Given the dynamic and evolving nature of the banking system, many regulations should be updated and simplified , including thresholds for applicability and benchmarks.

• The Fed is considering modifications to the Community Bank Leverage Ratio.

Submitted Comments: Bowman said many EGRPRA commenters remarked on the excessive burden created by information and regulatory data collections, including call report requirements. “We are carefully considering these comments and are evaluating ways to address related unnecessary regulatory burdens,” Bowman said.

ICBA Comments: In its EGRPRA comments, ICBA last week called on federal banking regulators in the Trump administration to continue advancing ICBA’s deregulatory recommendations.

Background: EGRPRA requires the federal banking agencies to review their regulations every 10 years to identify outdated, unnecessary, or unduly burdensome regulations, allowing community bankers to voice their concerns and the impact on the local communities they serve.