The 2016 Financial CHOICE Act
In September 2016, after previously releasing a discussion draft, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) introduced the 2016 Financial CHOICE Act, a package of financial services measures meant to overhaul the 2010 Dodd-Frank law. State regulators saw the introduction of the Financial CHOICE Act as a welcome opportunity to advance the debate on right-sizing financial regulations for community banks.
At the direction of the CSBS Legislative Committee, CSBS worked to have included in the 2016 Financial CHOICE Act several provisions that were aimed at right-sizing the regulation and supervision of community banks, as well as improving the efficiency of state licensing and supervision. Following weeks of engagement with members of Congress, CSBS saw the inclusion of two of its recommended provisions in the 2016 Financial CHOICE Act.
CSBS recommendations adopted in the 2016 Financial CHOICE Act included a provision stating state regulators be included in the regulatory processes related to capital election, and a recommended approach to tailoring the capital election process for less complex institutions through the use of a simpler leverage ratio.
The 2016 Financial CHOICE Act was marked up and passed out of the House Financial Services Committee in the second half of 2016, but it never made it to the House floor for consideration before the 114th Congress ended. An updated version of the bill passed the House in June 2017, and CSBS is actively working with members of Congress to have the perspectives of state financial regulators recognized in this financial regulatory overhaul legislation.