WASHINGTON (3/30/16)--One hundred and 31 members of the U.S. Congress sent a letter to federal financial regulators this week calling for more regulations to be tailored to fit an institution’s risk profile. The federal lawmakers, representing a cross-section of rural, suburban and urban districts nationwide, expressed deep concern over the ever-expanding regulatory burdens on community financial institutions.
“The aggregate weight of theses new regulations is stifling the efforts of community lending institutions to serve the economic needs of the individuals, businesses and local communities that are the life blood of our nation,” the letter reads. “While opinions differ on the necessity of various regulations, one concept of how regulations should be structure has been uniformly embraced--the need to ‘tailor’ regulations so that they are the right ‘fit’ for the institution involved.”
The letter is addressed to the heads of the National Credit Union Administration, Federal Reserve board of governors, Office of the Comptroller of the Currency and Consumer Financial Protection Bureau.
The legislators highlighted a common concern the Credit Union National Association (CUNA) brings up in its advocacy efforts for regulatory relief: the failures inherent in a “one-size-fits-all’ regulatory approach.
“We should not be operating in an regulatory environment where a ‘best practice’ for some is applied to all institutions regardless of size because of practical impact…is consolidation or failure and as a result the communities they serve suffer,” the letter reads.
The legislators asked the regulators to provide them with information on:
CUNA supports legislation that would require rulemakings be tailored to fit the risk profile and business model of institutions subject to regulatory action. The Taking Account of Institutions with Low Operation Risk (TAILOR) Act (H.R. 2896) passed the House Financial Services Committee earlier this month.