Reform Act Implementation

On May 24, 2018, President Trump signed into law the “Economic Growth, Regulatory Relief, and Consumer Protection Act”, which makes certain amendments to the Dodd-Frank Act and other modifications to post-crisis requirements. The law aims to reduce regulatory burden on community and mid-size banks; additionally, it modifies some of the enhanced prudential standards on larger banking organizations imposed by Dodd-Frank.

The formal process to amend affected regulations to reflect these statutory changes will take some time, even though many of the relief provisions became effective with the law’s passage. In light of this, on July 6, 2018, the federal banking agencies issued a statement detailing rules and associated reporting requirements that are immediately affected by the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Act). The statement from the agencies describes interim positions the agencies will take before incorporating the changes into their regulations.

The statement addresses the following areas: company-run stress testing requirements, resolution planning requirements, Volcker Rule, HVCRE exposures, examination cycle, municipal obligations as “high-quality liquid assets”, and appraisals for qualifying rural transactions. The statement indicates that, in most instances, the agencies will enforce existing rules in these areas in a manner consistent with the Act’s provisions, and will address the statutory amendments in a separate rulemaking process. In some instances, such as the expanded examination cycle and the Act’s provision for reduced reporting requirements for certain small depository institutions, the changes will be implemented through the normal rulemaking process.

The complete statement is available on each agency’s official website.

Washington, The Week Ahead - June 1-5, 2020

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