It seemed for a while that banks couldn’t get any relief from regulations. But after long delays brought on by debates over health care and tax reform, the attention in Washington, D.C., seems to be shifting toward bank deregulation. Here is a brief overview of some of the important compliance news items during the last few months.
New Bill Could Provide Significant Relief
The Senate was poised this week to take up a bill by Sen. Mike Crapo, R-Idaho, to roll back some Dodd-Frank Act regulations for banks. For instance, the bill would raise the threshold for enhanced prudential standards from $50 billion in assets to $250 billion. The bill also contains provisions for small banks, including raising the Federal Reserve’s threshold to qualify as a Small Bank Holding Co. to $3 billion in assets and allowing banks with less than $10 billion in assets to make loans free of the qualified mortgage rule as long as they hold those mortgages on their books.
Disability Rulings Disabled
After a flurry of warnings and lawsuits against banks and other companies regarding accessibility of their websites to people with disabilities under the Americans with Disabilities Act, the Department of Justice abruptly suspended an anticipated rulemaking process that would have proposed standards on the matter. The Justice Department had previously published four notices of advanced rulemaking. There was no indication whether a subsequent ruling could be forthcoming.
Home Mortgage Disclosure Act Rules Delayed
The Consumer Financial Protection Bureau, under the temporary leadership of White House Office of Management and Budget Director Mick Mulvaney, delayed implementation of a new rule that was supposed to go into effect in January 2018, to collect additional Home Mortgage Disclosure Act data from banks. Dodd-Frank requires the CFPB to collect more information that some feared would have provided fodder for regulators or the Justice Department to do investigations of banks’ lending practices.
Do You Really Need a Holding Company?
Several large banks are eliminating their holding companies, including Little Rock, Arkansas-based Bank of the Ozarks, Tupelo-Mississippi based BancorpSouth Bank and Salt Lake City, Utah-based Zions Bank. They are eliminating several regulators in the process, including the Federal Reserve and the Securities and Exchange Commission, says Sanford Brown of Alston & Bird. Such a move may make sense for banks whose holding companies aren’t engaged in nonbank activities prohibited for the bank, but there also are tax considerations for making such a move.