Is the Regulatory Burden About to Lifted for Financial Institutions?

Banks are about to receive some of the regulatory relief they have long been seeking.

As part of the review required every 10 years by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) of 1996, the Office of the Comptroller of the Currency (OCC) on Monday announced proposed changes in order to remove outdated or unnecessary provisions and rules, therefore reducing the regulatory burden on banks and federal savings associations.

The proposed changes announced Monday followed three Federal Register notices and six outreach meetings conducted nationwide since late 2014. In these outreach meetings, the OCC solicited comments from bankers, consumer and community groups, and other stakeholders or interested parties.

While the FDIC, the Federal Reserve, and the OCC are required to review the EGRPRA jointly, the proposed rule changes announced on Monday are exclusive to the OCC and its supervision of banks and federal savings associations, according to the announcement.

“Rather than delaying proposed changes until the completion of the EGRPRA review at the end of the year, the OCC is seeking to reduce undue burden sooner where possible,” the OCC’s announcement stated.

According to the OCC, Monday’s proposal complements other actions the agency has taken to further the EGRPRA’s mandate both separately and with other agencies. Those actions include:

• A final rule by the OCC issued last May to remove outdated or unnecessary licensing requirements;
• Interagency efforts to streamline Call Report requirements
• An interagency interim final rule that allows more qualifying community banks to be eligible for the 18-month exam cycle;
• Interagency guidance on the evaluation process in the appraisal rules

In addition to those actions, the OCC has recommended further regulator changes to remove or reduce unnecessary regulatory burden, such as: allowing community banks an exemption from the Volcker rule and a proposal to provide federal savings associations with more flexibility to adapt to business and economic changes, which in turn would allow them to better serve their communities.

The proposal published on Monday would:

• Remove notice and approval requirements for certain changes in permanent capital involving national banks;
• Simplify certain licensing rules for business combinations involving federal mutual savings associations;
• Clarify national bank director oath requirements;
• Remove certain financial disclosure requirements for national banks;
• Remove certain unnecessary regulatory reporting, accounting, and management policy requirements for federal savings associations;
• Allow the electronic submission of filings required under the Securities Act of 1933 and the Securities Exchange Act of 1934;
• Remove unnecessary requirements in the electronic activities rule for federal savings associations;
• Update recordkeeping and confirmation requirements for national banks’ and federal savings associations’ securities transactions; and
• Integrate and update OCC rules for national banks and federal savings associations relating to municipal securities dealers, Securities Exchange Act disclosures, securities offering disclosures, and insider and affiliate transactions.

Click here to view the notice published in the Federal Register by the OCC on the proposed rule changes. Comments must be received within 60 days of the notice’s publication in the Federal Register.