A new law intended to provide regulatory relief to banks and some other financial institutions, as well as the stable of new regulators now in place to implement that law, received a thumb’s up from the former acting head of the federal regulator of national banks Tuesday.
Keith A. Noreika, who served as Acting Comptroller of the Currency from May to November of last year, told the House financial institutions and consumer credit subcommittee that the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S.2155, enacted May 24 with the signature of President Donald Trump) will serve as a benefit to the financial system. He said the new law would provide “a regulatory framework that is more appropriately tailored to the risks posed by regulated financial institutions, particularly regional and international banking organizations.”
Noreika, who said he is now a partner in the financial institutions practice at law firm Simpson, Thacher & Bartlett LLP, also said he was optimistic that the new law, along with the new “heads of the Federal Banking Agencies,” would benefit the financial system. Noreika was referring to the group of new leaders at the agencies appointed by Trump over the last 18 months.
“In particular, I look forward to working with the federal banking agencies to promote a regulatory regime for regional banks in which each rule is appropriately tailored to the risk profile of any bank subject to such rule, based on a multi- factor analysis of the bank’s risk characteristics and a rigorous cost-benefit analysis of the intended and unintended economic consequences of each rule (beginning with an immediate moratorium on compliance with enhanced prudential requirements for any banking organization with less than $250 billion in total consolidated assets),” he said in prepared testimony.
He also said he looked forward to the economic benefits that the nation’s financial system would enjoy through a recalibration of the “current ring- fencing requirements” and a regulatory approach to international banking organizations “that gives more consideration to the strength of the firm’s global operations, which will ultimately result in a more robust U.S. financial market.”
Former Acting Comptroller Keith Noreika testimony before House subcommittee