banking expectations for the new congress banking... · 2015. 4. 20. · community banking –...
TRANSCRIPT
BANKING EXPECTATIONS
FOR THE NEW CONGRESS
Margaret Liu Senior Vice President and Deputy General Counsel
Conference of State Bank Supervisors
Banking Expectations for
the New Congress
Day with the Superintendent
Iowa Division of Banking
April 16, 2015
Margaret Liu
Conference of State Bank Supervisors
Overview
• The 114th Congress by the Numbers
• The People
• The Issues
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
4
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)
5
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)
6
The Issues -- Community Banking
• Mortgage Lending
• Supervision and Examinations
• Targeted Regulatory Relief
• Leadership Matters
7
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)
8
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)
9
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)
10
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
11
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
12
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
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
14
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
15
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
Thank You