CSBS Opposes House Bills that Would Weaken State Banking System
Washington, D.C. – In separate letters to Congress, the Conference of State Bank Supervisors (CSBS) stated its opposition to House bills now being considered that would preempt state regulations regarding data breach notifications and impose a new fee on state-chartered banks.
The bills at issue: H.R. 6743, the “Consumer Information Notification Requirement Act,” and H.R. 6741, the “Federal Reserve Reform Act of 2018.” Both bills are being considered by the House Financial Services Committee.
Under H.R. 6741, state-chartered banks would be required to pay a new fee for supervisory examinations conducted by the Federal Reserve. This provision amounts to a “tax on state-chartered banks…that will hit the smallest community banks the hardest,” said John W. Ryan, CSBS president and CEO in his letter. He added that these banks would “would pay more for the same level of supervision.”
Under H.R. 6743, expanded federal authority would prevent state regulators from enforcing state data breach notification laws. The bill would abandon the regulatory balance, struck decades ago via the Gramm-Leach-Bliley law, that according to Ryan, “establishes a floor for data breach and data security laws and expressly reserves the right of states to enact more stringent data breach and privacy laws for the protection of their citizens.”
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The Conference of State Bank Supervisors (CSBS) is the national organization of bank regulators from all 50 states, American Samoa, District of Columbia, Guam, Puerto Rico and U.S. Virgin Islands. State regulators supervise roughly three-quarters of all U.S. banks and a variety of nonbank financial services. CSBS, on behalf of state regulators, also operates the Nationwide Multistate Licensing System to license and register nonbank financial service providers in the mortgage, money services businesses, consumer finance and debt industries.