President Donald Trump’s appointees to each of the four federal bank and credit union regulatory agencies will testify together for the first time during a Senate Banking Committee hearing next week on implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).
Testifying in the Sept. 13 hearing will be Joseph Otting, Comptroller, Office of the Comptroller of the Currency (OCC); Randal Quarles, Vice Chairman for Supervision, Federal Reserve Board; Jelena McWilliams, Chairman, Federal Deposit Insurance Corp. (FDIC); and J. Mark McWatters, Chairman, National Credit Union Administration (NCUA) Board.
Lawmakers in the hearing are expected to grill the officials on progress – or lack thereof – toward implement the regulatory relief statute, whose provisions set effective dates ranging from 30 days following enactment to late 2019.
EGRRCPA, enacted May 24, removes or eases numerous financial institution regulatory and supervisory requirements, including many that were created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). It reduces the number of banking institutions subject to enhanced supervision requirements; exempts some from the Volcker Rule against proprietary trading; provides limited exemptions from certain mortgage disclosure requirements; removes a past restriction on credit union lending to small businesses (already implemented by NCUA); and makes more banks eligible for an extended, 18-month exam cycle (implemented under a recent interim final rule from the Fed, FDIC and OCC).
Among the most anticipated changes yet to come is implementation of the EGRRCPA Volcker Rule exemption, which applies to banking institutions having total assets valued at less than $10 billion and trading assets and liabilities not exceeding 5% of total assets.
Banking agencies came out with an unrelated Volcker Rule proposal in May that tailors requirements for three tiers of firms based on trading activity level. Noting that a proposal implementing the exemption will come later, the regulators stated they would not enforce the Volcker Rule in a manner inconsistent with EGRRCPA in the interim.
The public comment deadline on the current Volcker Rule proposal was recently extended to Oct. 17.