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house Bill H.R. 741

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.

SneakyPete's Opinion
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08/22/2019
👍🏻👍🏻 Pass H.R. 741As Soon As Fesibly Possible 👍🏻👍🏻 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. SneakyPete.......... 👍🏻👍🏻👍🏻👍🏻👍🏻. 8.21.19..........
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Kathi13's Opinion
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08/22/2019
Smaller banks and credit unions may be more sensitive to people’s needs than profit-focused big banks.
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Rebekah 's Opinion
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08/22/2019
I’m thoroughly tired of the “Too Big To Fail” banks getting billions of corporate welfare and paying penny penalties for egregious malfeasance while Main Street gets the shaft. End the corruption!
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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.

NoHedges's Opinion
···
08/22/2019
Congress has yet to relieve the tax burden from the middle-class voters who elected them. This GOP sponsored legislation, like many have said, is an attempt to undermine Dodd-Frank and place the burden of another FOR PROFIT economic recession on the shoulders of the middle-class tax-payers. Besides, I trust Tipton about as far as I can throw him. He has bankrupted the entire western slope of Colorado and destabilized the environment from excessive fracking. Rockslides and mudslides are at an all time high, and they have led to several deaths. Tipton has supported policies contaminating the water supply for Palisade Peaches and other agriculture, and supported Trump’s trade wars, which have led to an increased rate of suicide among ranchers. Tipton blocks every educational advancement and the schools in his district can only afford to be in session 4 days a week. The teachers have been threatened with jail time if they strike, yet a teacher with a Master degree and 10+ years of teaching experience, makes around 39K per year. Scott Tipton has voted to block healthcare, and is a proud member of the Republican’s “pro-life” campaign. Hell will quite literally have to freeze over, and the Almighty Himself ask me personally to support Scott Tipton, before I will CONSIDER backing any legislation he sponsors. Need I say more?
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jimK's Opinion
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08/22/2019
Why should the laws established to protect us from financial institutions taking unwarranted risk be relaxed for any financial institution? In particular, for those smaller institutions in which some people have their entire life savings? If there is a need to ‘level’ the playing field between large and small institutions, I recommend increasing the requirements on larger institutions- which have been rolled-back little by little every year- to the point where even smaller banks are once again getting back into member supported investments which are beginning to carry some of the same kind of risk which triggered the AGI collapse and the domino effect on other ‘too large to fail’ institutions. The public’s risk of having to undertake taxpayer funded bail-outs of these institutions was the driving force for the Dodd-Frank legislation. It is unlikely that taxpayers could be called upon to bail-out smaller institutions which are not ‘too large to fail’ and which often hold a family’s life savings. Why would any taxpayer support increasing the risks by relaxing the rules?
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Ellen's Opinion
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08/22/2019
This is proposed by the GOP. It likely screws the public, so no
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Financial Services
    IntroducedJanuary 24th, 2019

What is House Bill H.R. 741?

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. 741

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) reintroduced this bill from the 115th Congress 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.”

The American Bankers Association (ABA) supports this bill, which is part of its Blueprint for Growth. James Ballentine, EVP of the ABA, says:

“This important bill would help address the huge flow of new regulations that have made it more difficult for banks to meet the needs of consumers and small businesses as well as local and regional economies. Regulators should be empowered — and directed — to make sure that rules, regulations and compliance burdens only apply to segments of the industry where warranted.”

Last Congress, most House Democrats opposed this bill in committee, explaining in the 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.”

A number of consumer groups, including Americans for Financial Reform, Demos, the NAACP, and Public Citizen, opposed this bill in the previous Congress. In a joint letter to the House, these organizations wrote: 

"T[his] bill will put consumers at risk from dangerous products or practices and undermine the established notice and comment process in place for financial regulations. If adopted, the TAILOR Act could allow financial institutions to justify and exploit potentially dangerous loopholes, create confusion in the marketplace and cause unnecessary delays in the adoption of important consumer protections. Prudential and consumer regulators already have broad discretion in the application of their rulemakings. The proposal, review and comment process is the appropriate means through which particular accommodations should be considered, as they have been throughout the development of regulations under Dodd-Frank... Since an appropriately 'tailored' approach to regulation is already in place, the main effect of [this bill] would be to add numerous new 'cost benefit' type requirements that would block needed regulatory actions in the future and force banking regulators to conduct a burdensome and time-consuming re-analysis of every single consumer and financial protection they had passed under the Dodd-Frank Act, the CARD Act, and other recent consumer protection laws... Strong and consistent oversight of financial products and practices leads to safer products, a more predictable regulatory environment and a more competitive market. The TAILOR Act could lead to confusion in the marketplace and unnecessary delays in much-needed consumer protections critical to preventing another economic collapse."

This bill has 27 Republican cosponsors in the current session of Congress. Last Congress, it passed the House by a 247-169 vote with the support of 85 bipartisan cosponsors in the House, including 80 Republicans and five Democrats. It also has the support of the Credit Union National Association (CUNA)National Association of Federally-Insured Credit Unions (NAFCU), and the American Bankers Association (ABA).


Media:

Summary by Eric Revell

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

AKA

TAILOR Act of 2019

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.

    👍🏻👍🏻 Pass H.R. 741As Soon As Fesibly Possible 👍🏻👍🏻 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. SneakyPete.......... 👍🏻👍🏻👍🏻👍🏻👍🏻. 8.21.19..........
    Like (16)
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    Congress has yet to relieve the tax burden from the middle-class voters who elected them. This GOP sponsored legislation, like many have said, is an attempt to undermine Dodd-Frank and place the burden of another FOR PROFIT economic recession on the shoulders of the middle-class tax-payers. Besides, I trust Tipton about as far as I can throw him. He has bankrupted the entire western slope of Colorado and destabilized the environment from excessive fracking. Rockslides and mudslides are at an all time high, and they have led to several deaths. Tipton has supported policies contaminating the water supply for Palisade Peaches and other agriculture, and supported Trump’s trade wars, which have led to an increased rate of suicide among ranchers. Tipton blocks every educational advancement and the schools in his district can only afford to be in session 4 days a week. The teachers have been threatened with jail time if they strike, yet a teacher with a Master degree and 10+ years of teaching experience, makes around 39K per year. Scott Tipton has voted to block healthcare, and is a proud member of the Republican’s “pro-life” campaign. Hell will quite literally have to freeze over, and the Almighty Himself ask me personally to support Scott Tipton, before I will CONSIDER backing any legislation he sponsors. Need I say more?
    Like (35)
    Follow
    Share
    Why should the laws established to protect us from financial institutions taking unwarranted risk be relaxed for any financial institution? In particular, for those smaller institutions in which some people have their entire life savings? If there is a need to ‘level’ the playing field between large and small institutions, I recommend increasing the requirements on larger institutions- which have been rolled-back little by little every year- to the point where even smaller banks are once again getting back into member supported investments which are beginning to carry some of the same kind of risk which triggered the AGI collapse and the domino effect on other ‘too large to fail’ institutions. The public’s risk of having to undertake taxpayer funded bail-outs of these institutions was the driving force for the Dodd-Frank legislation. It is unlikely that taxpayers could be called upon to bail-out smaller institutions which are not ‘too large to fail’ and which often hold a family’s life savings. Why would any taxpayer support increasing the risks by relaxing the rules?
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    This is proposed by the GOP. It likely screws the public, so no
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    Savings and loan crisis. No thanks
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    I don’t trust the trump administration. I don’t trust the trump administration to do this appropriately.
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    Smaller banks and credit unions may be more sensitive to people’s needs than profit-focused big banks.
    Like (8)
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    I’m thoroughly tired of the “Too Big To Fail” banks getting billions of corporate welfare and paying penny penalties for egregious malfeasance while Main Street gets the shaft. End the corruption!
    Like (6)
    Follow
    Share
    I agree with NoHedges response below. Congress has yet to relieve the tax burden from the middle-class voters who elected them. Besides, I trust Tipton about as far as I can throw him. He has bankrupted the entire western slope of Colorado and destabilized the environment from excessive fracking. Rockslides and mudslides are at an all time high, and they have led to several deaths. Tipton has supported policies contaminating the water supply for Palisade Peaches and other agriculture, and supported Trump’s trade wars, which have led to an increased rate of suicide among ranchers. Tipton blocks every educational advancement and the schools in his district can only afford to be in session 4 days a week. The teachers have been threatened with jail time if they strike, yet a teacher with a Master degree and 10+ years of teaching experience makes around 39K per year. He has voted to block healthcare and is a proud member of the Republican’s “pro-life” campaign. Hell will quite literally have to freeze over, and the Almighty Himself ask me personally to support Scott Tipton before I will CONSIDER backIng any legislation he sponsors. Need I say more?
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    I don’t believe what I am seeing! Is federal control of banks in our constitution? What about the control of the Federal reserve which is neither?! So what, the feds can offer taxpayer bailouts again fleecing the wealth and our retirements for shady business practices? And lemme guess, our “protector” the federal government is coming to the rescue again? HEGELIAN DIALECTIC perhaps?! You should all be ejected from office and the idiots that voted you in there dont deserve their freedom which is probably why we are heading toward totalitarianism at break neck speed?!
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    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.
    Like (4)
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    REGULATIONS? DODD FRANK???? THE GOP HS CHOSEN TO MAKE SURE We The People are now back on the hook for the banks when they next FAIL!!! Although their CEO's and CFO's will still receive their HUGE UNEARNED BONUSES!!!
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    I’m not concerned with any banks burden of maintaining solvency. I have to do it. No one is trying to bail me out.
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    AUDIT THE FEDERAL RESERVE! They do not Constitutionally have the authority to control the money supply. Put the USA back on the gold standard! Otherwise, we will be put in a terrible financial crunch.
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    Nothing, nothing, nothing the GOP proposes, ever. Unless they all propose to quit and move to Greenland...Oh wait....”The (sob) Prime Minister (sob) was mean me. I am not going to play with her now. Aren’t the risks the same for all? Based on profits, investments, losses, expense. That it would not balance out is pure GOP smoke and mirrors.
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    The current banking system is essentially a monopoly, we need to encourage small business growth all we can in order to keep competition. Otherwise fees and rates will just keep going up, with nobody to stop them.
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    Absolutely not I do some work for smaller banks and I know for a fact they’re making money hand over fist. Talk executives at local banks are paid hundreds of thousands of dollars, give me a break.
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    Regardless of size, similar regulations must be required for all institutions assuming the public trust.
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    Regulations are in place to protect the consumer. 12 years ago we saw a great lose of money when the banks could not cover their liabilities. Instead maybe the government should break up the large banks who are said to be to big to fail so the government has to bail them out.
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    Small banks and credit unions need to be protected from the government and large banks. Big banks always get their way.
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