economic growth regulatory relief and consumer protection act pdf

Economic Growth Regulatory Relief And Consumer Protection Act Pdf

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The Economic Growth, Regulatory Relief and Consumer Protection Act

Eitel , Michael T. Escue , C. Andrew Gerlach , Camille L. Orme , Benjamin H. Weiner , and Michael A. In addition, the legislation establishes new consumer protections and amends various securities- and investment company-related requirements. The legislation, which enjoyed substantial bipartisan support, was adopted on May 22, , in the U.

House of Representatives, by a vote of to , and in the U. Senate, by a vote of 67 to 31, on March 14, The legislation preserves the fundamental elements of the post-Dodd-Frank regulatory framework, but it includes modifications that will result in some meaningful regulatory relief for smaller and certain regional banking organizations. However, because the legislation does not itself amend the regulations the Federal banking agencies have promulgated to implement the EPS, the agencies will need to amend their existing regulations to account for the new thresholds.

That process may take some time, especially for regulations that were issued on an interagency basis. Similarly, the legislation does not itself directly affect other impactful post-crisis regulatory requirements that were not established pursuant to Dodd-Frank but are instead grounded in other legal authorities. We expect the Federal banking agencies will revise these requirements to mirror the asset thresholds in the new legislation, but that process could also take some time.

We believe these legislative and regulatory revisions could encourage bank merger and acquisition activity. Although the legislation includes a variety of modifications to post-crisis regulatory requirements that apply to banking organizations of all sizes, the most substantial of these modifications are reserved for smaller, midsize, and certain regional banks. Attached to the memorandum here PDF: These statutory factors include capital structure, riskiness, complexity, financial activities, and size.

Dodd-Frank permitted—but did not require—such tailoring. The following chart summarizes the modifications in the legislation to the application of required EPS to BHCs, as compared to their application under Dodd-Frank:. In addition to modifying the EPS, the legislation makes certain changes to bank capital and liquidity requirements:. Under the U. Of note, the definition of HVCRE ADC loan excludes loans made prior to January 1, the effective date of the standardized approach and revises the regulatory exemption in the current definition of HVCRE exposure relating to projects in which the borrower meets certain contributed capital requirements and other prudential criteria by, among other things, removing restrictions on the release of internally generated capital and capital contributed in excess of the minimum required for the exemption to apply.

The legislation also contains numerous other modifications to the Dodd-Frank regulatory framework, most of which are designed to provide regulatory relief for smaller financial institutions. The following are notable highlights:. In carrying out these requirements, the Federal banking agencies are required to consult with State banking regulators and notify the applicable State banking regulator of any qualifying community bank that exceeds or no longer exceeds the Community Bank Leverage Ratio.

In addition to the provisions above, the legislation revises various regulatory compliance and examination requirements targeted at small, midsize, and certain regional financial institutions:. In order to qualify, the specified insured depository institutions and credit unions must meet certain conditions relating to prepayment penalties, points and fees, negative amortization, interest-only features, and documentation. It is not clear how that consensus would be obtained.

The current reporting thresholds are 25 closed-end mortgages and open-end lines of credit for and and open-end lines of credit beginning in The legislation explicitly preempts and supersedes any conflicting State law, but only to the extent of such conflict. This provision apparently is aimed at facilitating the use of scanned identification documents when consumers seek to open accounts online or through mobile applications in certain States that currently do not permit the practice.

Section directs the GAO to prepare a report within one year of the date of enactment regarding foreclosure, delinquency, and homeownership rates in Puerto Rico before and after Hurricane Maria. In addition to numerous banking regulatory reforms, the legislation contains a number of new consumer protections relating to, among other things, credit reports and student loans.

As a response to the recent Equifax breach, Section requires credit reporting agencies to provide consumers with fraud alerts and freezes on credit at no cost to consumers when identity theft is suspected. Although the directive to conduct this study demonstrates recognition of the problem and requires recommendations on whether additional legal authorities or resources are needed, this provision stops short of directing any specific government action to address this pressing issue.

Section provides qualified immunity for reports to supervisory and law enforcement agencies and agencies responsible for adult protective services of suspected elder financial exploitation made by financial institutions and certain of their personnel. The covered personnel, who also receive immunity, include compliance personnel and supervisors, as well as registered representatives, investment advisors, and insurance producers. The immunity is available when the relevant individuals are trained in elder care abuse and when the report is made in good faith and with reasonable care.

Covered individuals and their institutions receive immunity from civil or administrative proceedings for the disclosure. Section amends TILA to prohibit a private education loan creditor from declaring a default or accelerating the debt of the student obligor solely on the basis of a bankruptcy or death of a cosigner. In addition, Section requires the GAO, in consultation with the Federal banking agencies, to conduct a study within one year of enactment regarding these student loan rehabilitation requirements, including their effectiveness, associated costs, and effect on credit reporting accuracy, as well as the risks to safety and soundness posed by the requirements.

The legislation also revises or addresses certain Federal securities laws and regulations governing securities offerings, securities exchanges, and investment companies.

Section eliminates a long-standing exemption from registration under the ICA for an investment company organized under the laws of and having its principal place of business in Puerto Rico or another U.

Section directs the SEC to amend its Regulation A, which provides an exemption from registration for securities offered in certain smaller public offerings, to make it available to companies subject to reporting under Sections 13 or 15 d of the Securities Exchange Act of , and, for Tier 2 offerings, to deem an issuer that is subject to and in compliance with such reporting to be in compliance with the reporting requirements of Rule of Regulation A.

As noted above, the legislation does not itself directly affect a variety of post-crisis regulatory requirements that incorporate the asset thresholds in Dodd-Frank but were established under but not required by Dodd-Frank or were established under other legal authorities. Accordingly, we expect that, although not required to do so, the Federal Reserve and other Federal banking agencies will seek to revise many of these requirements to reflect the asset thresholds and other statutory modifications embodied in the legislation.

The following are several key regulations that are not directly affected by the legislation, but that the Federal banking agencies could, and we expect generally will, modify to conform to the new asset thresholds:. We believe the legislation may encourage bank merger and acquisition activity in at least two ways. Supporting this reluctance, the Federal Reserve had indicated that applications for such mergers would get special scrutiny to assure that the resulting company could in fact satisfy EPS.

Second, there has been a general belief that any applications by a covered BHC to acquire another banking organization would likely receive a heightened degree of scrutiny. See generally 12 C.

Part resolution plans. G-SIBs , dated April 17, Appendix C to Part See 17 C. Nearly all FBOs with significant U. B III 6 to Part 44, B III 6 to Part , B III 6 to Part 75, B III 6 to Part Appendix D to Part These regulations may also apply to certain smaller OCC-supervised institutions that are affiliates of OCC-supervised institutions subject to the heightened expectations. Appendix A to Part Samuel R. Weiner are partners, and Michael A.

PCCE makes no representations as to the accuracy, completeness and validity of any statements made on this site and will not be liable for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with the author. Detailed Summary of The Legislation A.

Dodd-Frank Enhanced Prudential Standards Although the legislation includes a variety of modifications to post-crisis regulatory requirements that apply to banking organizations of all sizes, the most substantial of these modifications are reserved for smaller, midsize, and certain regional banks. Basel III-based risk-based and leverage capital rules; risk management requirements including requirements, duties, and qualifications for a risk management committee and chief risk officer ; and liquidity stress testing and buffer requirements.

Other Bank Capital and Liquidity Reforms In addition to modifying the EPS, the legislation makes certain changes to bank capital and liquidity requirements: 1. Additional Post-Crisis Reforms The legislation also contains numerous other modifications to the Dodd-Frank regulatory framework, most of which are designed to provide regulatory relief for smaller financial institutions.

The following are notable highlights: 1. Small Bank Regulatory Relief In addition to the provisions above, the legislation revises various regulatory compliance and examination requirements targeted at small, midsize, and certain regional financial institutions: 1. Additional Banking Provisions The legislation also contains the following banking-related provisions: 1. Consumer Protections In addition to numerous banking regulatory reforms, the legislation contains a number of new consumer protections relating to, among other things, credit reports and student loans.

Enhanced Credit Reporting Agency Requirements Relating to Identity Theft and Overall Review of Credit Reporting and Credit Scoring Practices As a response to the recent Equifax breach, Section requires credit reporting agencies to provide consumers with fraud alerts and freezes on credit at no cost to consumers when identity theft is suspected.

Senior Citizen Financial Exploitation Reporting Immunity Section provides qualified immunity for reports to supervisory and law enforcement agencies and agencies responsible for adult protective services of suspected elder financial exploitation made by financial institutions and certain of their personnel.

Student Loan Default and Rehabilitation Relief Section amends TILA to prohibit a private education loan creditor from declaring a default or accelerating the debt of the student obligor solely on the basis of a bankruptcy or death of a cosigner. Securities-Related Reforms The legislation also revises or addresses certain Federal securities laws and regulations governing securities offerings, securities exchanges, and investment companies.

Eliminate Exemption for Investment Companies in U. Territories Section eliminates a long-standing exemption from registration under the ICA for an investment company organized under the laws of and having its principal place of business in Puerto Rico or another U.

Amendments to Regulation A Section directs the SEC to amend its Regulation A, which provides an exemption from registration for securities offered in certain smaller public offerings, to make it available to companies subject to reporting under Sections 13 or 15 d of the Securities Exchange Act of , and, for Tier 2 offerings, to deem an issuer that is subject to and in compliance with such reporting to be in compliance with the reporting requirements of Rule of Regulation A.

Regulatory Implementation Beyond Dodd-Frank As noted above, the legislation does not itself directly affect a variety of post-crisis regulatory requirements that incorporate the asset thresholds in Dodd-Frank but were established under but not required by Dodd-Frank or were established under other legal authorities.

The following are several key regulations that are not directly affected by the legislation, but that the Federal banking agencies could, and we expect generally will, modify to conform to the new asset thresholds: CCAR Process. Among other requirements that do not apply to smaller institutions, the CEO of a banking entity or, in the case of a foreign banking entity, the senior management officer of the U.

Current Federal Reserve Supervisory Proposals. One of these proposals would provide new guidance on board of director effectiveness for large BHCs, large SLHCs, and non-bank financial companies designated for supervision by the Federal Reserve.

Under its statutory authority to prescribe safety and soundness standards, the OCC issued regulations establishing heightened risk governance standards for large national banks and their boards of directors.

Bank Mergers and Acquisitions We believe the legislation may encourage bank merger and acquisition activity in at least two ways. Footnotes [1] See Pub. Follow Follow this blog Get every new post delivered right to your inbox. Email address.

“Economic Growth, Regulatory Relief, and Consumer Protection Act” is Enacted

View a PDF of this letter here. These additional data fields are essential for federal and state regulators to find patterns of discriminatory or predatory lending. They certainly would have been useful before Supporters of S. While we are sensitive to the need for regulatory burdens to be carefully tailored to the size of lending institutions, the expanded HMDA data fields include information that lenders already routinely collect in the underwriting process.

Oppose S. 2155, the “Economic Growth, Regulatory Relief and Consumer Protection Act”

The FDIC passed a final rule in September providing qualifying community banking organizations the ability to opt in to the new community bank leverage ratio CBLR framework , which simplifies regulatory capital adequacy burden by removing certain risk-based capital requirements. In , President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act, the first legislatively enacted regulatory relief bill since the recession, which rolled back various provisions of the Dodd-Frank Act. For institutions that fall below the 9 percent capital requirement but remain above 8 percent, the final rule establishes a two-quarter grace period to either meet the qualifying criteria again or comply with the generally applicable capital rule.

The undersigned organizations write to express our opposition to S. As you know, S. The bill already contains destructive policies that roll back or eliminate essential protections put in place by the Dodd-Frank Wall Street Reform and Consumer Protection Dodd-Frank Act after unchecked reckless lending nearly destroyed the US economy. Although this bill seeks to protect smaller lenders while maintaining access to credit, it contains significant, harmful provisions that do not relate to small institutions and does not create a meaningful set of new protections for consumers from predatory and deceptive lender practices. Furthermore, this bill ultimately harms small and community banks.

Economic Growth, Regulatory Relief and Consumer Protection Act

Transparency & Accountability - EGRRCPA (S. 2155) Rulemakings

Eitel , Michael T. Escue , C. Andrew Gerlach , Camille L.

Text of S. Rule PDF. Provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the Committee on Armed Services. Provides that an amendment in the nature of a substitute consisting of the text of Rules Committee Print shall be considered as adopted and the bill, as amended, shall be considered as read. Makes in order only those further amendments printed in the Rules Committee report and amendments en bloc described in section 3 of the rule. Provides that the amendments printed in the report may be offered only in the order printed in the report, may be offered only by a Member designated in the report, shall be considered as read, shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent, shall not be subject to amendment, and shall not be subject to a demand for division of the question. Waives all points of order against the amendments printed in the report or against amendments en bloc as described in section 3 of this rule.

Board of Governors of the Federal Reserve System

Accordingly, for these transactions, those institutions are exempt from the collection, recording, and reporting requirements for some, but not all, of the data points specified in current Regulation C. The Bureau expects later this summer to provide further guidance on the applicability of the Act to HMDA data collected in As announced in December , the Bureau does not intend to require data resubmission for HMDA data collected in and reported in , unless data errors are material. Furthermore, the Bureau does not intend to assess penalties with respect to errors in data collected in and reported in

Senate, Washington, D. The Act calls on the federal banking agencies to aid in promoting economic growth by further tailoring regulation to better reflect the character of the different banking firms that we supervise. While recognizing that the core objectives of the post-crisis regime--higher and better quality capital, stronger liquidity, and increased resolvability--have contributed to reducing the likelihood of another severe financial crisis, the Act also acknowledges that we should be seeking to improve the efficiency with which we achieve these objectives, and gives the federal banking agencies the task of executing the thoughtful detail work necessary to enhance that efficiency. Of course, detail work can be challenging to get right.

The final rule is unchanged from the proposal issued for public comment in April The EGRRCPA requires the agencies to permit certain banking organizations—those predominantly engaged in custody, safekeeping, and asset servicing activities—to exclude qualifying deposits at certain central banks from their supplementary leverage ratio. The supplementary leverage ratio is one of many tools used by the federal bank regulatory agencies to determine minimum required capital levels and ensure financial stability in the event of stress in the banking system. It applies only to large or complex internationally active banking organizations. What are you searching for in OCC.

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