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S. 366 introduced to TAILOR regulations for traditional community banks

Sen. Mike Rounds (R-S.D.) has introduced essentially the same bill he sponsored in the 114th Congress (S. 3153). The new bill, S. 366, would require federal regulatory agencies to take risk profiles and business models of institutions into account when crafting regulations.

Rounds is a member of the Senate Committee on Banking, Housing and Urban Affairs.

“It is the first step in achieving a truly 'bifurcated' regulatory system by which traditional community banks are treated differently than their larger brethren when it comes to applicability of federal banking rules and regulations,” OBA President and CEO Roger Beverage said. 

S. 366 would also require a review of regulations issued in the past seven years and a report on how they might be better tailored. If the review finds regulations issued since 2010 do not conform to the TAILOR Act, the agency would be required to revise those regulations.

Sen. Rounds issued the following statement:

Financial institutions across South Dakota have been negatively impacted by burdensome, unnecessary regulations because of disproportionate compliance costs since the passage of the Dodd-Frank Act in 2010. Excessive costs and regulatory hurdles continue to hurt consumers the most.

The TAILOR Act would ease the regulatory burden on smaller financial institutions so they can focus their resources on taking care of their customers, rather than spending time and money on compliance, the costs of which are ultimately passed onto the consumer in South Dakota. I look forward to working with my colleagues on this important legislation so our smaller financial institutions are better able to meet the needs of families and local businesses.

The concept of the TAILOR Act was introduced in both the House and Senate in the last (114th) Congress by Sen. Rounds and Rep. Scott Tipton (R-Colo.). The bipartisan TAILOR Act cleared the House Financial Services Committee earlier this year. A new House version of the bill is expected to be introduced soon.

“South Dakota is home to some of the smallest and the largest banks in the world, with wide variations in their business models,” said Curt Everson, president and CEO of the South Dakota Bankers Association. “Bankers from those institutions agree that today's one-size-fits-all regulatory scheme doesn't make sense. We applaud Sen. Rounds for introducing the TAILOR Act to start the conversation about matching bank regulation to risk.”

The TAILOR Act would additionally require federal regulatory agencies to provide an annual report to Congress outlining the steps they have taken to tailor their regulations.

The TAILOR Act also requires regulators to conduct a review of all the regulations issued by the agencies since the 2010 passage of the Dodd-Frank Act. If the review finds that the regulations issued since 2010 do not conform to the TAILOR Act, the agency would be required to revise the regulations.

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