Hearing of U.S. Senate Committee on Banking, Housing, and Urban Affairs "Consideration of Regulatory Relief Proposals"

Hearing of U.S. Senate Committee on Banking, Housing, and Urban Affairs "Consideration of Regulatory Relief Proposals"

Last year, the Banking Committee held a hearing on proposals providing regulatory relief for banks, thrifts, and credit unions. The hearing covered all points of views and was made up of three panels of witnesses: Members of Congress, regulators, and trade organizations and consumer groups.

The witnesses built a strong legislative record by describing the costs of regulations and by providing specific recommendations to reduce this ever growing burden, without compromising safety and soundness. The sheer volume of regulatory requirements facing the financial services industry today presents a daunting task for any institution.

Many of the witnesses also noted that this is not simply an issue for banks and credit unions. The customer feels the impact in the form of higher prices, and in some cases, diminished product choice. One example that was stressed as an outdated regulation is the Depression-era provision prohibiting the payment of interest on demand deposits, otherwise known as business checking accounts.

At the end of the hearing, I asked FDIC Vice Chairman Reich, as the leader of the interagency EGRPRA task force, to review the testimony presented at the hearing and prepare a matrix of all the recommendations and positions for the committee. The result was 136 burden reduction proposals. Since that time the list has grown to 187. That was a huge undertaking, and I am very appreciative of the hard work and cooperation of so many involved, especially Vice Chairman Reich.

As this comprehensive list demonstrates, it is important for Congress to periodically review the laws applicable to the financial services industry to ensure that compliance and red tape does not impose an unreasonable and unproductive burden on the economy and truly achieves its important goals.

Today, we will receive testimony from regulators, financial services industry groups, consumer groups, and small businesses on these proposals. As we proceed, we need to make sure that we enact enough meaningful reforms so that the cost of change isn't a burden in and of itself. The specific recommendations of the witnesses today will be of great use to me and other members of the Senate Banking Committee as we create legislation to address the important issues of financial services regulatory reform.

http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Testimony&TestimonyID=915&HearingID=163