January 23, 2018

January 23, 2018

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January 22, 2018

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Bipartisan Bills Providing Regulatory Relief to Community and Midsize Banks Emerge in Senate

Senators Jon Tester, D-Mont., and Jerry Moran, R-Kan., introduced a bill today (S. 1139) that would raise the threshold for a banking organization to be subject to Dodd-Frank Act Stress Tests (DFAST) to $50 billion in total consolidated assets from the current $10 billion threshold.  The bill, titled the Main Street Regulatory Fairness Act, would provide relief for 72 banking organizations that currently have consolidated assets of $10 billion or greater, but less than $50 billion.

Earlier this month, Senators Tester and Moran also reintroduced the CLEAR Relief Act, S. 1002, which would provide relief to community banks that includes:

  • amendments to the “qualified mortgage” definition to include any mortgage originated and retained for at least three years by a bank with less than $10 billion in total consolidated assets;

  • an exemption from the Volcker Rule for banking organizations with $10 billion or less in total assets;

  • an exemption from the requirement of the Sarbanes-Oxley Act to conduct annual management assessments of internal controls for banking organizations with $1 billion or less in total consolidated assets; and

  • an exemption from escrow requirements under the Truth in Lending Act for banks with $10 billion or less in total consolidated assets.

These two bills signal that bipartisan regulatory reform legislation is likely to focus on relief for community and midsize banking organizations rather than larger institutions.

© 2018 Covington & Burling LLP


About this Author

Randy Benjenk, Covington, foreign financial institutions attorney, trade associations lawyer

Randy Benjenk helps clients navigate the bank regulatory landscape. He represents domestic and foreign financial institutions and trade associations on a variety of bank regulatory issues, including compliance, government affairs, and transactional matters.

Mr. Benjenk regularly advises clients on compliance with provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bank Holding Company Act, the Change in Bank Control Act and U.S. and international capital and liquidity regulations.