Letter Opposing House Effort To Hobble Bank Regulators

Last updated: 3/2/2016

Today, the House Financial Services Committee holds its latest cattle-call markup of industry-backed bills designed to  weaken consumer, taxpayer, depositor and investor protections. As it often does, it claims its efforts are on behalf of small banks and credit unions. But the goal of the HR 2896, The TAILOR Act is not really to help the small institutions, it is actually to weaken the broad authority regulators have to protect the public. It is designed to add redundant busywork to the Consumer Financial Protection Bureau's efforts to close loopholes and protect the public from exploitation of the kinds of loopholes that led to the Great Crash of 2008 and the subsequent economic downturn.  By the way, CFPB and other regulators (Federal Reserve, OCC, FDIC) are already required to "tailor" regulations for small or rural banks and credit unions. Download the letter from U.S. PIRG and other Americans for Financial Reform coalition members below. Excerpt:

"The undersigned consumer groups oppose the Taking Account of Institutions with Low Operation Risk Act of 2015 (H.R. 2896) and amendments that 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. We urge you to vote no on H.R. 2896 and any amendments.
HR 2896 purports to simply require regulators to ‘tailor’ rules to the specific risks of financial institutions. But regulators have already taken extensive actions to adjust and modify their regulations to be appropriate for particular institutions and financial products, and are already required to consider such issues through the notice and comment process. Since an appropriately 'tailored' approach to regulation is already in place, the main effect of H.R. 2896 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.

Resource file download

PDF icon Letter opposing HR2896_The Tailor Act

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