Highway Funding Bill Includes Community Bank Regulatory Relief

Congress passed and President Obama signed into law a highway and transportation funding bill that included community bank regulatory relief. Three bills detailed below were included in an amendment to the funding bill. All had previously passed the House as stand-alone measures with very strong bi-partisan support.

H.R. 601, the Eliminate Privacy Notice Confusion Act

Summary: This legislation will reduce confusion among consumers by clarifying that they will receive privacy notices after opening a new account (only) when their financial institution’s privacy policies change rather than on an annual basis. The bill passed the House by voice vote on April 13th.

H.R. 1553, the Small Bank Exam Cycle Reform Act of 2015

Summary: This legislation will provide regulatory relief for community banks by allowing well-managed institutions to qualify for longer exam cycles. The bill passed the House 411-0 on Oct. 6th.

H.R. 1334, the Holding Company Registration Threshold Equalization Act of 2015

Summary: This legislation increases the shareholder registration and deregistration thresholds contained in the JOBS Act (passed a few years ago) to savings and loan holding companies. The bill passed the House by voice vote on July 14th.

The highway and transportation funding legislation also exempts community banks $10 billion and under from cuts to Federal Reserve Bank stock dividends which will save approximately $200 million per year (ICBA estimate). In addition to the exemption, the law also contains CBAI/ICBA advocated measures which will: restore funds cut from the federal crop insurance program; drop language that would have extended higher Fannie Mae and Freddie Mac guarantee fees; remove language that a bank must operate “predominantly” in rural or underserved areas to qualify for a QM mortgage underwriting exemption; and establish a process for appealing the CFPB's rural area designation.

CBAI thanks members of the Illinois Congressional delegation for their overwhelmingly bi-partisan support for this important legislation.

December 7, 2015