This is an important action by South Dakota’s Junior Senator, Mike Rounds:
Rounds Introduces Bill to Ease Regulatory Burden on Local Banks & Credit Unions
WASHINGTON—U.S. Senator Mike Rounds (R-S.D.), a member of the Senate Committee on Banking, Housing and Urban Affairs, today introduced the Taking Account of Institutions with Low Operation Risk (TAILOR) Act, a bill to require federal regulatory agencies to take risk profiles and business models of institutions into account when crafting regulations.
“Since the passage of the Dodd-Frank Act in 2010, smaller financial institutions in particular have been negatively impacted by burdensome, unnecessary regulations because of disproportionate compliance costs,” said Rounds. “These disproportionate costs and regulatory hurdles have hurt consumers the most. The TAILOR Act would ease the regulatory burden on smaller financial institutions so they can focus their resources on taking care of their customers, rather than spending time and money on regulatory compliance. This will allow them to better meet the needs of families and local businesses, which will in turn lead to a stronger economy and healthier communities across the state.”
“South Dakota is home to some of the smallest and the largest banks in the world, with wide variations in their business models,” said Curt Everson, President of the South Dakota Bankers Association. “Bankers from those institutions agree that today’s one-size-fits-all regulatory scheme doesn’t make sense. We applaud Senator Rounds for introducing the TAILOR Act to start the conversation about matching bank regulation to risk.”
The TAILOR Act would require regulatory agencies, such as the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Consumer Financial Protection Bureau, to take into consideration the risk profile and business models of individual financial institutions and tailor those regulations accordingly. Additionally, the bill requires the regulatory agencies to provide an annual report to Congress outlining the steps they have taken to tailor their regulations.
The TAILOR Act also requires regulators to conduct a review of all the regulations issued by the agencies since the 2010 passage of the Dodd-Frank Act. If the review finds that the regulations issued since 2010 do not conform to the TAILOR Act, the agency would be required to revise the regulations.
This is pretty important news for our state lending institutions, which have seen themselves under increasing attack from the Democrats who have not only been extremely hostile towards the banking and finance industries, but have adopted a “one size fits all” solution in law and regulation, whether it’s J. P. Morgan Chase, or Bankstar out of Elkton, South Dakota.
It’s even more important in terms of the vocal commitment of Democrats to fight any regulatory relief for community lenders. Take a look at what their draft platform for the Democrat Party states with regards to how they want to paint banks with a one-size fits all brush:
from the draft platform section entitled “The Fight for Economic Fairness and Against Inequality.”
“We will also vigorously implement, enforce, and build on the landmark Dodd-Frank financial reform law, and we will stop dead in its tracks every Republican effort to weaken it. We will continue to protect consumers and defend the CFPB from Republican attacks. Our goal must be to create a financial system and an economy that works for all Americans, not just a handful of billionaires. We support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets. We acknowledge that there is room within our party for a diversity of views on a broader financial transactions tax.”
“Democrats will not hesitate to use and expand existing authorities as well as empower regulators to downsize or break apart financial institutions when necessary to protect the public and safeguard financial stability, including new authorities to go after risky shadow-banking activities. Banks should not be able to gamble with taxpayers’ deposits or pose an undue risk to Main Street. Democrats support a variety of ways to stop this from happening, including an updated and modernized version of Glass-Steagall and breaking up too-big-to-fail financial institutions that pose a systemic risk to the stability of our economy.”
If that doesn’t scare the pants off of the business community it should, because it’s going to only serve to limit the availability of credit and choke off lending services in your hometown under ever more burdensome regulations.
That is, unless you want to combine it with more government:
The effort is led by consumer advocates, financial reform groups, postal labor unions and some leading liberals, such as Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.). They say that offering services such as paycheck cashing, bill payment and free ATMs would provide cash-strapped consumers with an affordable alternative to payday, auto-title and other short-term loans that have been criticized for high fees.
“We can have our Postal Service provide modest banking to low-income people where they can cash their checks and they can do banking,” Sanders said. “I think it will help the post office and it will help millions of low-income people.”
The Postal Service’s inspector general’s office agrees. It estimates that expanding financial services beyond the current limited offerings, which include money orders and international funds transfers, could pump $8.9 billion a year into the financially struggling agency.
“The Postal Service has a public mission to serve citizens and support the growth of commerce,” the inspector general’s office said in a report last spring that presented five potential approaches for expanded banking services. “And while it is required to cover its costs, profit is not its key motive.”
At the same time Democrats in Washington are intent on killing private industry with one-size-fits-all regulation, they’re also trying to replace private industry with yet an expanded government agency. Again. And it has got to stop.
Senator Rounds’ legislation is a common sense step to base regulation on those being regulated, as opposed to a top-down, one-size fits all government solution, which Democrats seem intent to wield as a mace to smash all that stand in their way.
Either Democrats care about what main street needs, or they don’t. It’s as simple as that. And services to main street are best provided by those living there. And Rounds’ TAILOR act is a step in the right direction to meet those needs.