banking expectations for the new congress banking... · 2015. 4. 20. · community banking –...
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BANKING EXPECTATIONS
FOR THE NEW CONGRESS
Margaret Liu Senior Vice President and Deputy General Counsel
Conference of State Bank Supervisors
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Banking Expectations for
the New Congress
Day with the Superintendent
Iowa Division of Banking
April 16, 2015
Margaret Liu
Conference of State Bank Supervisors
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Overview
• The 114th Congress by the Numbers
• The People
• The Issues
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The 114th Congress by the Numbers
• House Remains Republican-Controlled
• 245 Republicans; 188 Democrats; 2 vacancies
• Republicans gained 13 seats
• Largest GOP majority since World War II
• Senate Flipped from Democrat to Republican control
• 54 Republicans; 44 Democrats; 2 Independents
(caucus with Democrats)
• Republicans gained 9 seats
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People House -- Financial Services
Committee
• Differences in leadership styles and philosophies
• Chairman Jeb Hensarling (R-TX)
• Ranking Maxine Waters (D-CA)
• Financial Institutions Subcommittee
• Chairman Randy Neugebauer (R-TX)
• Ranking Member Lacy Clay (D-MO)
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People -- Senate Banking Committee
• Chairman Richard Shelby (R-AL)
• Ranking Member Sherrod Brown (D-OH)
• Financial Institutions Subcommittee
– Chairman Pat Toomey (R-PA)
– Ranking Member Jeff Merkley (D-OR)
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The Issues -- Community Banking
• Mortgage Lending
• Supervision and Examinations
• Targeted Regulatory Relief
• Leadership Matters
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Community Banking – Mortgage Lending
• Relief from CFPB’s Ability-to-Repay Rule
– Greater flexibility for balloon loans in rural areas (H.R.
1259; S. 871)
– Qualified Mortgage status for all mortgages held in
portfolio (H.R. 1210)
• Basel III and Mortgage Servicing Rights
– Study and implementation delay (H.R. 1408)
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Community Banking – Supervision and
Exams
• Exam Fairness and Reform Act (S. 774)
– Report and exit interview deadlines
– Independent appeals of material supervisory
determinations through FFIEC
– Anti-retaliation
• Exam Cycle
– Raising the asset cap for 18-month exam cycle (H.R.
1553)
– Establishing 24-month exam cycle (H.R. 1233)
• Call Report
– Short-form call report (H.R. 1233)
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Community Banking –Regulatory Relief
• Gramm Leach Bliley Annual Privacy Notice Relief (H.R.
601; S. 423)
• Federal Reserve Small Bank Holding Company
Statement
– Raise upper limit from $1 billion to $5 billion (H.R.
1233)
• De-Risking and Operation Choke Point
– Cutting off funding (H.R. 1413; S. 477)
– Regulators and account terminations (H.R. 766)
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Community Banking – Leadership
Matters
• Federal Reserve Board – Requiring at least one
Governor with community bank or community bank
supervisory experience
– Enacted into law, January 2015
– Nomination of Allan Landon pending
• FDIC Board – At least one member with State bank
supervisory experience
– H.R. 1601 tightens existing requirement
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Community Banking – A Definitional
Approach
• Challenge of defining community banks
• Challenges posed by solely using asset thresholds to
define community banks
• Looks to asset size plus other qualitative factors:
– Local deposits;
– Local lending;
– Local management;
– Business model
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Community Banking – CSBS Initiatives
• CSBS-Federal Reserve Community Bank Research
Conference
– September 30-October 1, St. Louis
– Integrating industry town halls, industry survey, and academic
research
– https://www.stlouisfed.org/bank-supervision/2015-community-
banking-conference
• Cybersecurity – Executive Leadership on Cybersecurity
– http://www.csbs.org/CyberSecurity/Pages/default.aspx
– Outreach events
• EGRPRA
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Other Financial Services Priorities
• Relief for mid-size, regionals, and super-regionals
• CFPB structural and governance reform
• Cybersecurity
• Dodd-Frank oversight
– CFPB
– FSOC
• Ex-Im reauthorization
• Federal Reserve reform
• Housing finance reform
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Key Dates to Watch
• May 31 -- Highway Trust Fund expires
• June 30 – Ex-Im Bank authorization expires
• September 30 -- Federal government FY 2015 funding
expires
• Late October/Early November -- Debt ceiling expected to
be reached
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Outlook
• Consensus still tough
• Possible compromises on corporate tax reform, trade,
and infrastructure
• Possible financial services related legislation
– Community bank regulatory relief
– Raise threshold for designating BHCs as SIFIs from
$50 billion to some higher number ($250 billion) or
some qualitative assessment
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Thank You