Like Countable?

Install the App
TRY NOW

house Bill H.R. 4296

Should Banks’ Capital Requirements be Based on Current Risks, Not Just Past Losses?

Argument in favor

Bank regulators should only impose risk capital requirements on banks that are based on current risks and a forward-looking assessment of potential losses, rather than historic losses.

···
02/27/2018
Yes. All industries are changing so quickly, especially banking , with their newly created unethical scams, like the housing derivatives, etc. some of the past losses they may be referencing, may not even be applicable today. There needs to be more transparency and more ethical solutions to address potential risks to consumers and the public.
Like (30)
Follow
Share
Donald's Opinion
···
02/27/2018
Past performance does not necessarily indicate present day situations. It is a good idea to make regulations based on current market conditions. We remember the past for reference only. It is today's market conditions which should apply to regulators.
Like (5)
Follow
Share
Janet 's Opinion
···
02/28/2018
Change is constant. Keep up with the culture if you want to protect the people today.
Like (4)
Follow
Share

Argument opposed

This bill would diminish, rather than strengthen, the incentive for megabanks to maintain stronger internal controls and risk management systems to prevent their failure.

Kathy's Opinion
···
02/27/2018
This bill would diminish, rather than strengthen, the incentive for megabanks to maintain stronger internal controls and risk management systems to prevent their failure. Of course the Putin/Republicans want this . They are in process of dismantling democracy and are complicit with Russia . Paul Ryan just fired a elections cyber security committee man because he was working to prevent Russian hacking of the 2018 elections .
Like (32)
Follow
Share
Hiro9's Opinion
···
02/27/2018
Easing operational risk capital requirements for banks. What could possibly go wrong?
Like (19)
Follow
Share
Anna's Opinion
···
02/27/2018
This is an attempt to weaken Dodd-Frank and will lead us back into the same disaster we found ourselves in under W Bush. Don’t destroy our economy and then make us pay to bailout the banks again.
Like (5)
Follow
Share

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 February 27th, 2018
    Roll Call Vote 245 Yea / 169 Nay
      house Committees
      Committee on Financial Services
    IntroducedNovember 8th, 2017

Log in or create an account to see how your Reps voted!

What is House Bill H.R. 4296?

This bill would prohibit federal banking agencies from establishing an operational-risk capital requirement (i.e. money & non-cash assets that have to be held in reserve) for banks unless the requirement: 1) is based on, and is appropriately sensitive to, current risks; 2) is determined under a forward-looking assessment of potential losses — rather than only considering historic losses current law; and 3) allows certain adjustments.

Impact

Financial institutions; and financial regulators.

Cost of House Bill H.R. 4296

$22.00 Million
The CBO estimates that enacting this bill would increase the deficit by $22 million over the 2018-2027 period due to $26 million in direct spending and an increase of $4 million in revenues.

More Information

In-Depth: Sponsoring Rep. Blaine Luetkemeyer (R-MO) introduced this bill to set parameters for federal financial regulators when establishing operational risk capital requirements:

“Operational risk capital requirements were first agreed to at the Basel Committee and then implemented in the United States by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Federal Reserve. Like many concepts created by the Basel Committee, the original intent may have been authentic but the implementation has brought about unintended consequences. My legislation will instill confidence by instituting clear guardrails for operational risk capital requirements that focus on an institution’s current activities and businesses. I thank my colleagues in the House Financial Services Committee for supporting this legislation and working to ensure capital standards are effective and appropriately tailored.”

Some House Democrats opposed this bill, with several explaining their opposition to what they’ve dubbed a “big bank giveaway” in the bill’s committee report:

“According to bank regulators and the Treasury Department, efforts have been underway internationally to make administrative and technical refinements to the operational risk capital requirement, and we should expect changes in the near future. Congress should closely monitor these developments to see if regulators strike the right balance, and if not, then consider a legislative response. Thus, H.R. 4296 is premature and possibly short-sighted to enact statutory conditions regarding the operational risk capital requirement. This framework would diminish, instead of strengthen, the incentive for megabanks to maintain stronger internal controls and risk management systems.”

This legislation passed the House Financial Services Committee on a 43-17 vote and has the support of two cosponsors, including one Democrat and one Republican.


Media:

Summary by Eric Revell

(Photo Credit: scyther5 / iStock)

Official Title

To place requirements on operational risk capital requirements for banking organizations established by an appropriate Federal banking agency.

    Yes. All industries are changing so quickly, especially banking , with their newly created unethical scams, like the housing derivatives, etc. some of the past losses they may be referencing, may not even be applicable today. There needs to be more transparency and more ethical solutions to address potential risks to consumers and the public.
    Like (30)
    Follow
    Share
    This bill would diminish, rather than strengthen, the incentive for megabanks to maintain stronger internal controls and risk management systems to prevent their failure. Of course the Putin/Republicans want this . They are in process of dismantling democracy and are complicit with Russia . Paul Ryan just fired a elections cyber security committee man because he was working to prevent Russian hacking of the 2018 elections .
    Like (32)
    Follow
    Share
    Well, in the olden days, we tested business on their balance sheet and on the profit-loss statement. Future earnings look like crystal ball fortune telling. However, if banks are presenting fake business documents, jail cells would be appropriate.
    Like (40)
    Follow
    Share
    Easing operational risk capital requirements for banks. What could possibly go wrong?
    Like (19)
    Follow
    Share
    Past performance does not necessarily indicate present day situations. It is a good idea to make regulations based on current market conditions. We remember the past for reference only. It is today's market conditions which should apply to regulators.
    Like (5)
    Follow
    Share
    Why should regulations not take empirical evidence of past losses into account? This bill appears to be an attempt to weaken some of the protections that were created after the housing crisis. I don’t want to need to pay to bailout banks again. I am strongly opposed.
    Like (5)
    Follow
    Share
    This is an attempt to weaken Dodd-Frank and will lead us back into the same disaster we found ourselves in under W Bush. Don’t destroy our economy and then make us pay to bailout the banks again.
    Like (5)
    Follow
    Share
    Change is constant. Keep up with the culture if you want to protect the people today.
    Like (4)
    Follow
    Share
    Liquidity works when conditions are rosey until suddenly it freezes when TSHTF, and then my taxes provide the bailout. No thanks.
    Like (4)
    Follow
    Share
    That’s called a fantasy. Banking should be based on reality.
    Like (4)
    Follow
    Share
    This feels like it's more to do with Republicans pushing their own agendas than doing what's right for the citizens of the country. I don't see any benefit to rushing into legislation regarding this and can only see the potential problems this bill could create.
    Like (3)
    Follow
    Share
    This bill makes no sense. Why would we not consider historic losses when determining a bank’s capital requirements? A bank’s past behavior should be a very important factor regarding how that financial institution is treated today. Republicans are clearly just trying to legislate huge deregulation giveaways to Wall Street. Another financial crash is coming and this bill is only going to contribute to it.
    Like (3)
    Follow
    Share
    My credit history reflects my past decisions. Why shouldn't theirs? Poor past decisions are DEFINITELY a "risk factor".
    Like (2)
    Follow
    Share
    Diminishing incentives for banks to keep tight internal controls is, itself, a risk. Depositors should have assurances that their money is not being used in risky ways.
    Like (2)
    Follow
    Share
    Banks put our country in total crisis a decade ago. They need to be held accountable for their full financial picture. Otherwise. they’re famous for risking it all while leaving customers at their mercy-and holding the tab.
    Like (2)
    Follow
    Share
    Big Banks are no good for the little person. Why does this government keep giving them a break, like doing away with fines owed by them for breaking laws. They got rewarded for forking up.☹️
    Like (2)
    Follow
    Share
    Sometimes we must trust the wisdom of others, especially when we are operating outside our comfort zone. If I.got.an.idea says it is needed, I am going to trust his track record. Learning to work together means learning to listen to those proven worthy.
    Like (2)
    Follow
    Share
    Any time you're speculating about losses and current risks, you're gambling. Correct me if I'm wrong, but said banks are therefore gambling with investors money.
    Like (2)
    Follow
    Share
    Remember when mortgage backed securities had no current or future risk associated with them? I don’t trust them to evaluate their own risks anymore.
    Like (2)
    Follow
    Share
    Yes it should. When taking financial risks, you don't just consider one side of the coin. You've got to consider all things that could potentially affect the performance of your investment/purchase.
    Like (2)
    Follow
    Share
    MORE