Crapo: Reg Relief Mark-Up Tackles Tough Issues

CRAPO: REG RELIEF MARK-UP TACKLES TOUGH ISSUES

Thursday mark-up is result of 18 months of negotiation, discussion

Idaho Senator Mike Crapo released the following statement regarding the upcoming regulatory relief legislation mark-up later this week:

"Today marks the culmination of many months of hard work to bring industry, regulators, consumer groups and other interested parties together on a measure that will provide regulatory relief for financial institutions. The Senate Banking Committee will hold a mark-up on The Financial Services Regulatory Relief Act of 2006 on Thursday morning, and I am pleased with the result.

"Nearly two years ago, we started with a long wish list of reforms advocated by various groups. That list has been winnowed down to 70 items that will reduce the regulatory burdens faced by industry and passed along to consumers. Among the most significant reforms are:

Reg B relief: This section directs the SEC to consult with and seek the concurrence of the Federal banking agencies in implementing rules under Section 201 of the Gramm-Leach-Bliley Act. In addition, this section specifies that such rulemaking shall supersede any existing proposed or final rules issued by the SEC. Reg B has sparked broad opposition from Members of Congress, the Federal banking agencies, and the banking industry. Reg B, if implemented in its current form, would lead to the very result that Congress sought explicitly to avoid, i.e., the establishment of a burdensome regulatory maze that would lead banks and thrifts to stop offering these products to their customers. (Section 101) Collateral modernization: This section would protect taxpayers' interests by allowing the Secretary of the Treasury to determine the types of securities that may be pledged in lieu of surety bonds, and require that the securities be valued at current market rates. Additionally, the improved regulatory flexibility will allow banks greater options to meet pledging requirements, freeing up capital for more efficient uses such as lending, investments, or returning capital to shareholders. (Section 901) Monetary policy provisions: Two sections deal with monetary policy and will enhance the Federal Reserve's ability to efficiently conduct monetary policy. These provisions allow the Federal Reserve to pay interest on balances held by depository institutions at Reserve Banks, and grant the Federal Reserve greater flexibility in setting the reserve requirements for depository institutions. (Sections 201 and 202) Development of model privacy forms: This section directs the agencies to finalize a proposal to make privacy notices to consumers more readable and understandable. (Section 728) "It has been a rewarding challenge to work on this issue for the last eighteen months. Chairman Shelby and Ranking Member Sarbanes have been terrific to work with on this issue as we tried to reach consensus. It has been important to me to bring together the reforms that will make a difference to the industry. Since the House has already passed a regulatory reform bill, it has been my goal to get to conference with legislation passed by the Senate before the end of the 109th Congress. With the measure now slotted for mark-up, we should be able to reach that and get legislation signed into law before the year is out."

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http://crapo.senate.gov/media/newsreleases/release_full.cfm?id=254934&&