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house Bill H.R. 1116

Should Financial Regulators Tailor Rules to Limit the Burden on Smaller Banks & Credit Unions?

Argument in favor

The compliance costs of Dodd-Frank’s one-size-fits-all regulations are crushing many of America’s smaller community banks and credit unions. This bill ensures that regulations take into account the risk profiles and business models of smaller institutions to limit the burden on them.

DrRichSwier's Opinion
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03/13/2018
Americans need small hometown banks. Banks started and run by local citizens for local citizens.
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Brian's Opinion
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03/13/2018
The compliance costs of Dodd-Frank’s one-size-fits-all regulations are crushing many of America’s smaller community banks and credit unions. This bill ensures that regulations take into account the risk profiles and business models of smaller institutions to limit the burden on them.
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Rose 's Opinion
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03/14/2018
We need credit unions and hometown banks to operate without being penalized because of the poor decisions and greed of big banks.
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Argument opposed

Financial regulators and Congress already take steps to tailor rules so they don’t create an excessive burden on small financial institutions. This bill goes too far, and if enacted would lead to endless legal challenges of recent and future rules.

Sabrina's Opinion
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03/13/2018
There’s no need to pass additional legislation that is redundant. How about passing more regulation that protects consumers instead?
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Leon's Opinion
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03/13/2018
No, I’ve not forgotten the savings and loan bailout. These people can and will abuse the system especially if they think others are as well.
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Michael777's Opinion
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03/11/2018
The Dodd-Frank bill is what's keeping the big banks from gambling with our savings! If the gutting of Dodd-Frank continues, then do not be surprised when a Second Great Recession happens soon.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house Passed March 14th, 2018
    Roll Call Vote 247 Yea / 169 Nay
      house Committees
      Committee on Financial Services
    IntroducedFebruary 16th, 2017

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What is House Bill H.R. 1116?

This bill — the TAILOR Act — would require federal financial regulatory agencies to tailor their regulatory actions so as to limit the burdens on the institutions involved given their risk profiles and business models, such as smaller community banks or credit unions. Regulators would be required to report to Congress on specific actions taken to tailor rules.This requirement would apply to future regulatory actions in addition to rules adopted within the last seven years.

The bill's full title is the Taking Account of Institutions with Low Operation Risk (TAILOR) Act.

Impact

Smaller financial institutions; and federal financial regulators.

Cost of House Bill H.R. 1116

$80.00 Million
The CBO estimates that enacting this bill would cost $80 million over the 2018-2027 period.

More Information

In-Depth: Sponsoring Rep. Scott Tipton (R-CO) introduced this bill to require that regulations be tailored to fit smaller financial institutions’ business models and risk profiles:

“Under Dodd-Frank rules, banks and credit unions are currently regulated under a one-size-fits-all approach regardless of size or risk profile. As a result, regulations designed and intended for big banks are also applied to small community and independent banks or credit unions. The compliance costs associated with these one-size-fits-all mandates are often unworkable for small community banks, which often don’t have the employees or resources to meet the compliance obligations. Regulations play an important role in keeping our communities safe and secure, but they should be tailored to meet the risk profile and business model of specific institutions. The TAILOR Act would allow federal regulators to better focus their oversight efforts, and allow small banks and credit unions to focus their time and assets on investing in their communities, helping to generate economic growth and job opportunities.”

Most House Democrats opposed this bill in committee, explaining in its committee report:

“Congress has carefully monitored the implementation of the Dodd-Frank Act and, when warranted, has passed targeted legislation or encouraged regulators to further tailor rules to reduce unnecessary compliance requirements on community financial institutions while maintaining robust standards and appropriate protections that are in the public interest… We share the belief that regulators must take into account, and tailor rules, for smaller sized institutions when appropriate. Unfortunately, the TAILOR Act would only serve to put consumers and the financial system at risk by subjecting important regulations to endless litigation.”

This legislation passed the House Financial Services Committee on a 39-21 vote and has the support of 85 cosponsors in the House, including 80 Republicans and five Democrats.


Media:

Summary by Eric Revell

(Photo Credit: Matthew G. Bisanz / Creative Commons)

AKA

TAILOR Act of 2017

Official Title

To require the Federal financial institutions regulatory agencies to take risk profiles and business models of institutions into account when taking regulatory actions, and for other purposes.

    Americans need small hometown banks. Banks started and run by local citizens for local citizens.
    Like (42)
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    There’s no need to pass additional legislation that is redundant. How about passing more regulation that protects consumers instead?
    Like (78)
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    No, I’ve not forgotten the savings and loan bailout. These people can and will abuse the system especially if they think others are as well.
    Like (52)
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    The Dodd-Frank bill is what's keeping the big banks from gambling with our savings! If the gutting of Dodd-Frank continues, then do not be surprised when a Second Great Recession happens soon.
    Like (21)
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    All bank need regulations!!
    Like (20)
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    I say know not because I’m against the idea but I’d like to have a more definitive explanation of the difference between a large and small bank
    Like (15)
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    One quick look at this bill and you see a lot of exceptions for banks not a small as the title seems to imply. Banks as large as those which created the crisis that prompted the legislation in the first place.
    Like (14)
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    The compliance costs of Dodd-Frank’s one-size-fits-all regulations are crushing many of America’s smaller community banks and credit unions. This bill ensures that regulations take into account the risk profiles and business models of smaller institutions to limit the burden on them.
    Like (12)
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    We need credit unions and hometown banks to operate without being penalized because of the poor decisions and greed of big banks.
    Like (7)
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    There are no small or burdened banks.
    Like (7)
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    The problem was never the small guys. It was always the ‘too big to fail’ guys and getting rid of Dodd-Frank is putting Americans back into the crosshairs of greedy, unscrupulous big bankers. Shame on all who voted for this crap. We will remember this in November 2018.
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    I just read the bill and I could not see where it was limited to community banks. This bill applies to ALL banks no matter what size and allows lobbyists to force regulators to reconsider every normal regulation for each particular bank, greatly increasing the cost of regulation and increasing the hodgepodge of regulations depending on your lobbyists. This does not help community banks. Instead it will hurt smaller banks as the big banks get more breaks. It will result in less service for ordinary business people and workers in a community.
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    This just seams like common sense and good regulation policy. A local credit union shouldn’t be regulated under the same rules regime as Wells Fargo.
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    Again, this supports the rich no need
    Like (3)
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    Bait and switch - imply it's to help small banks and then add more Wall Street padding. These demons single-handedly destroyed our economy with no repercussions. Let's not replicate that poor decision!
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    The premise of this legislation is nonsense. Smaller banks and credit unions are not being overly burdened with regulations. This is just another bill that will allow our financial sector to run wild, putting consumers at risk and setting up our economy for another crash! Vote no!
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    Many small institutions will still have regulators both State and Federal. Many Saving and Loans got into problems in 2007 and were closed or combined with sounder banks. All that are left are covered under FDIC or other federal coverage which will still come with inspectors. Adjusting regulations to fit the needs of smaller lenders makes sense.
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    What about the increased risk to depositors and their money?
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    Unless there is a separate bill, this has to be passed in order to regulate the larger banks that have done so much damage.
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    The big deal here, jack, is that what is the difference between big and small. 1.5 billion is still pretty friggen big. The definition needs to be small, less than a billion would be high but likely reasonable
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