Press Releases

Today, the House Committee on Financial Services, led by Chairman French Hill (AR-02), held a hearing reviewing how the Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA) are aligning their supervisory and regulatory actions with the Committee’s goal of streamlining financial regulations and reducing compliance burdens for community banks and institutions of all sizes.

On Tailoring of Enhanced Prudential Standards:

Chairman Hill said, “When President Trump signed S. 2155 into law, there was broad bipartisan recognition from Congress that the federal banking regulators need to tailor their rules based on an institution’s size, complexity, and risk profile. I want to applaud each of your agencies for your work in returning to this standard that was regrettably rejected by many of the supervisory leaders in the Biden Administration.”

Chairman Hill cited a recent letter the Committee sent encouraging the federal banking regulators to reconsider the application of Enhanced Prudential Standards for category II, III, and IV banks. Chairman Hill asked Michelle Bowman, Vice Chair for Supervision, Board of Governors of the Federal Reserve, if this was something she expected the agencies to undertake to which she replied, “Over the years, I have strongly supported the concept of tailoring regulation to the size, complexity, and risk of the institutions. I do plan to review our tailoring framework and our approach to ensure that it has the intended effect that Congress intended in S. 2155.”

On Regulatory Threshold Requirements for Community Banks:

Financial Institutions Subcommittee Chair Andy Barr (KY-06) said, “The Dodd-Frank Act established a number of regulatory requirements for community banks with $10 billion or more in assets. In the 15 years since its passage the economy has grown, meaning that banks must also grow in order to compete and stay competitive against their largest peers, but the thresholds on community banks have remained the same. That’s why I’m drafting legislation that indexes certain regulatory thresholds of community banks to nominal GDP.”

Barr went on to ask Vice Chair Bowman if the $10 billion threshold disincentivizes community banks from growing and impacts their competitiveness. Vice Chair Bowman replied, “In my experience of working with community banks that are approaching the $10 billion threshold, it certainly does disincentivize their growth. It gives them few options to be able to address the additional supervisory requirements that are imposed at that threshold level.”

On Basel III Endgame Capital Requirements:

Barr emphasized: “An America first banking regulatory agenda should not seek to achieve international regulatory harmonization for harmonization’s sake, instead it should seek to advantage American economic competitiveness. Of course safety and soundness and of course making sure our banks are well-capitalized but we should not just simply be looking for international harmonization in the implementation of Basel III. We should be focused on economic growth as we balance economic and financial stability.”

On Refocusing Prudential Regulators on Their Core Mission:

National Security, Illicit Finance, and International Financial Institutions Subcommittee Chair Warren Davidson (OH-08) stated, “… in this Committee, we’ve been hammering in a simple truth: America’s financial institution and our system thrives when our regulators stick to safety and soundness, not targeting political rivals or picking winners and losers in the marketplace, weaponizing the laws and, frankly, lack of laws in our government.”

On the Committee’s Recent Debanking Report:

“The debanking report this Committee issued yesterday detailed how Biden regulators pressured banks to debank crypto, energy, firearm companies, as well as politically disfavored groups, resurrecting operation chokepoint that started under Obama,” declared Subcommittee on Oversight and Investigations Chairman Dan Meuser (PA-09).

“We’ve done a lot of work here looking back at Chokepoint 2.0, in particular how the broader crypto and digital asset space was being governed by enforcement actions, an incredibly unproductive mechanism to do that. I think we have a huge opportunity here to move forward CLARITY to prevent the type of abuse we saw with Chairman Gensler and with other regulators in the broader Biden Administration,” said Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence Chair Bryan Steil (WI-01).

Witnesses Echoed the Work of the Committee:

Vice Chair Bowman said, “I support efforts by Congress to reduce burden on community banks. I support increasing static and outdated statutory thresholds, including asset thresholds, that have not been updated for years. Asset growth due, in part, to inflation over time has resulted in small banks becoming subject to laws and regulations that were intended for much larger banks. I also support improvements to the Bank Secrecy Act and anti-money-laundering framework that will assist law enforcement while minimizing unnecessary regulatory burden that disproportionately falls on community banks. As an example, the thresholds for Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs) have not been adjusted since they were established, despite decades of significant growth in the economy and financial system. These thresholds should be updated to more effectively focus resources on those transactions and activities that truly are suspicious.”

The Honorable Jonathan Gould, Chairman, National Credit Union Association said, “The federal banking system must remain dynamic, competitive, and fair. By Providing a path for banks to embrace new technologies in a safe and sound manner, ending politicized debanking, and modernizing supervision, we are ensuring the long-term relevance of the federal banking system. And we are restoring the OCC’s historic balancing of prudence and progress.”

The Honorable Kyle Hauptman, Chairman, National Credit Union Association said, “NCUA’s mission is to enable access to financial services by facilitating safe, sound, and resilient credit unions. We are reviewing the entirety of our regulations to focus on measurable and material risks, not on enforcing outdated and obsolete requirements. Removing outdated, overly prescriptive, and unduly burdensome requirements will allow credit unions to serve their memberships while NCUA focuses on risks to safety and soundness. The agency has identified several opportunities to revise or revisit its regulations.”

The Honorable Travis Hill, Acting Chairman, Federal Deposit insurance Corporation said, “President Trump signed into law the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), which established a federal regulatory framework for stablecoin issuers. The FDIC will be responsible for licensing and supervising subsidiaries of FDIC-supervised IDIs approved to issue payment stablecoins. The Act requires a number of rulemakings, including establishing capital requirements, liquidity standards, and reserve asset diversification standards, among others. The FDIC has begun work to promulgate rules to implement the GENIUS Act; we expect to issue a proposed rule to establish our application framework later this month and a proposed rule to implement the GENIUS Act’s prudential requirements for FDIC-supervised payment stablecoin issuers early next year.”