Skip Navigation Links
2017 Press Releases
Florida and Arkansas Begin Using Uniform Mortgage Test; 54 State Agencies Now Using the Test
State Regulators Oppose OCC Special Charter For Non-Banks
State Financial Regulators Release BSA/AML Compliance Tool for Industry
CSBS Board Appoints Wyoming’s Albert Forkner as Chairman-Elect
State Regulators Promote “Fintech Friendly” Features of National Registry
College Students Participate in Nationwide Community Bank Competition
Statement on the Illinois Fintech Regulatory Roundtables
CSBS Urges Congress to Weigh in Against OCC Non-Bank Charter
State Regulators Highlight EGRPRA Priorities for Financial Regulatory Relief
Gonzales, Hughes and Jones Re-Appointed to FFIEC State Liaison Committee
State Regulators Announce Changes to Money Services Businesses Reporting
State Regulators Issue Cease-and-Desist Orders to Subsidiaries of Ocwen Financial Corp.
CSBS Files Complaint Against Comptroller of the Currency
Gonzales Elected as State Liaison Committee Chairman
Stork Appointed to FFIEC State Liaison Committee
CSBS Announces Vision 2020 for Fintech and Non-Bank Regulation
CSBS Statement on New York Department of Financial Services Lawsuit Against OCC
CSBS Announces Five Finalist Teams in the 2017 Bank Case Study Competition
CSBS Announces New Leadership
The University of Akron Wins First Place in CSBS Community Bank Competition
Fed Chair Yellen Will Open 2017 Fed/CSBS Community Banking Research Conference;
FFIEC Proposes Additional Revisions to Streamline “Call Report” for Small Institutions
State Regulators Call for an End to One-Size-Fits-All Bank Regulation
Print-Friendly   |   Email-A-Friend 

 3/24/2017 

Media Release

Conference of State Bank Supervisors
        1129 20th Street, NW, 9th Floor, Washington, DC, 20036

 State Regulators Highlight EGRPRA Priorities for Financial Regulatory Relief  

Washington, D.C. – State financial regulators highlight their perspectives and offer suggestions to further reduce regulatory burden related to certain issues raised as part of the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review process.

The EGRPRA review is required by the Federal Financial Institutions Examination Council (FFIEC) and its member agencies every 10 years. As part of this process, federal financial regulators issued this week a joint report to Congress detailing the results of this cycle’s review.  State regulators participated in the EGRPRA review as a representative body through the State Liaison Committee (SLC), a member of the FFIEC. While state financial regulators support the findings of the FFIEC EGRPRA report, the SLC identified additional opportunities to further reduce regulatory burden.  The recommendations are reported in a letter to the federal banking agencies, and adopted as Appendix 1 within the joint report to Congress.   

“We are pleased to work collaboratively with our federal counterparts to identify specific obstacles that inhibit the ability of smaller institutions to best serve their communities,” said Karen Lawson, Chair of the State Liaison Committee and Director of Banking at Michigan Department of Insurance and Financial Services. “State and federal regulators have made a purposeful effort over the last two years to solicit feedback from the industry and other stakeholders and address issues raised during the review process. While there is still more work to do, I believe the findings identified in the FFIEC’s report to Congress, as well as the actionable recommendations in the SLC letter, have potential to make a meaningful impact on community banks while retaining effective regulation.”

The key opportunities identified by the SLC, as outlined in its letter – Appendix 1 of the report – include the following:

Simplify capital rules for smaller and less-complex institutions. The SLC found that community banks devote a disproportionate share of costs to comply with these federal rules. The general complexity of the rules and various aspects such as high volatility commercial real estate and the treatment of mortgage servicing assets unnecessarily complicate small bank operations.  The SLC supports efforts to tailor capital requirements for smaller and less complex institutions.

Continue and expand efforts to reduce Call Report burden. State regulators and the federal agencies worked together to streamline the Call Report. But further reduction is necessary, particularly for smaller and less complex banks. Efforts need to accelerate and broaden in scope, including expanding the criteria that permit small institutions to file a streamlined Call Report. The SLC supports moving from a numerical threshold – currently $1 billion in assets – to a multi-factor set of criteria, such as the FDIC’s Community Bank Research definition.

Reexamine the regulatory threshold for appraisals. State regulators are concerned that the thresholds may unnecessarily impede credit availability, particularly in rural and underserved markets, due to the associated costs to borrowers and appraiser shortages in numerous markets throughout the country. The SLC recommends updating the threshold amounts – for both residential as well as commercial real estate loans - to reflect inflation, and that the agencies consider a transaction-based, de minimis test that permits banks to make and retain a limited number of exempt loans.

Reevaluate how the Herfindahl-Hirschman Index (HHI) is employed. The current HHI’s reliance on deposit market share to determine market concentration is problematic. As calculated, the HHI does not offer a representative assessment of market concentration as non-depositories are generally not included and other types of depository institutions are not fully considered. The SLC found that the current HHI calculation does not provide a realistic representation of market competition, and may place smaller firms at a disadvantage.

Appendix 1 of the FFIEC report is available here. The full FFIEC report is available here.

The SLC consists of five representatives of state banking agencies that supervise financial institutions. Members are designated from American Council of State Savings Supervisors, Conference of State Bank Supervisors, National Association of State Credit Union Supervisors, and the FFIEC.

#  #  #
©2017 CSBS   Terms of Use \ Privacy Policy \ Site Map
1129 20th Street, N.W., 9th Floor  \  Washington, DC  \  20036  \  Tel. 202.296.2840  \  Fax. 202.296.1928