Regulators report to Congress on community bank relief efforts

Federal banking regulators testified before Congress on their efforts to address excessive regulatory burdens on community banks.

CBLR Reform: Testifying at a House Financial Services Committee oversight hearing, FDIC Chairman Travis Hill cited regulators’ final rule lowering the Community Bank Leverage Ratio to 8% to encourage broader adoption and provide relief.

Mortgage Rules: Federal Reserve Vice Chair for Supervision Michelle Bowman told the panel that the agencies are working to encourage community banks to return to mortgage lending by appropriately calibrating regulatory capital rules for these activities.

Tailored Supervision: Comptroller of the Currency Jonathan Gould said his agency has removed fixed examination requirements and created a supervision group focused on community banks to ease supervisory burdens.

Background: Following last year’s reforms to audit, reporting, and BSA/AML standards, regulators this year have advanced an ICBA-supported final rule codifying the elimination of reputation risk from their supervisory programs, are working to establish independent FDIC and OCC supervisory appeals offices, and are responding to a March executive order directing agencies to consider additional reforms.