Sponsors (8)
Requires banking regulators to tailor rules to institutions' risk profiles, create a short-form call report for qualifying community banks, and report on supervision modernization.
Official title: Require the Federal financial institutions regulatory agencies to take risk profiles and business models of institutions into account when taking regulatory actions, and for other purposes.
Introduced February 5, 2025 by Marion Michael Rounds · Last progress February 5, 2025
The bill aims to reduce paperwork and tailor supervision to small, low‑risk banks—preserving local banking services and increasing disclosure about tailoring decisions—but does so at the risk of weaker oversight and consumer protections and with added administrative and implementation costs.
Community banks and their customers: reduces reporting and compliance burdens (shorter call reports and tailored rule application), lowering operating costs and helping preserve local banking services.
Taxpayers and the public: increases transparency and accountability by requiring agencies to disclose how tailoring considerations were applied in each NPRM/final rule and to report periodically to Congress.
Customers and local markets: directs regulators to consider aggregate impacts on institutions' ability to serve customers and markets, allowing more flexible services for local needs.
Consumers: tailoring could weaken consumer protections for certain institutions if regulators loosen requirements, increasing consumer risk.
Taxpayers and the system: reduced or shorter supervisory reporting could weaken oversight and increase the risk of undetected problems that lead to FDIC losses and taxpayer costs.
Federal and state supervisors and staff: documenting tailoring decisions, producing mandated reports, and preparing studies will increase administrative workload and may divert examiner resources from supervision.
Based on analysis of 4 sections of legislative text.
Requires federal banking regulators to tailor regulatory actions to the risk profiles and business models of banks and credit unions, disclose how tailoring was applied in rulemaking, and report on those actions to Congress. Creates a short-form call report option for banks that meet the Community Bank Leverage Ratio and directs agencies to review and revise recent regulations to reduce unnecessary burdens; also directs a study and report on modernizing bank supervision in consultation with state supervisors.