Pub. 8 2018-2019 Issue 2

4 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S Chairman’s Message B ankers across the country celebrated a hard-fought victory in May when S. 2155 was signed into law, bring- ing much-needed regulatory relief to help banks better serve their customers and communities. It came as a result of a persistent, eight-year advocacy effort on the part of bankers, state and national associations and others to address some of the unintended consequences of Dodd-Frank. We are grateful to our nation’s lawmakers for their thoughtful consideration of this legislation. It’s important to note that it is a great first step toward right-sizing rules that have not only held back our economy but, more importantly, served as a barrier to credit access for millions of Americans. The bill includes 16 provisions, some of which became effective immediately while others would soon follow. In July, Federal Reserve Chairman Jerome Powell said in a testimony before the Senate Banking Committee that the Fed wouldmove to implement the remaining provisions as soon as possible. Work continues toward additional relief measures, of which there are a multitude of options. There is more to be done to recalibrate regulations to tailor them based on a bank’s risk profile and business model – and most importantly to allow them to serve customers who have been disenfranchised by overregulation. In addition to relief efforts at the Congressional level, bank - ers are also heartened not only bymovement toward relief in the regulatory agencies but by the new regulators, themselves. New leaders at the FDIC, Fed, OCC and CFPB are refreshing to work with and have even been independently looking at steps toward regulatory relief. Those include modernizing the Community Reinvestment Act and updating Bank Secrecy Act/anti-money laundering rules, not to mention a top-to-bottom review of the Consumer Financial Protection Bureau’s rules and actions. Also, regulators are developing an approach that would identify highly capitalized community banks and exclude them from the Basel III capital standards, which is available to banks under $10 billion that meet leverage ratio requirements. This is a modified version of one that state associations and the American Bankers Association had proposed; Congress directed the banking agencies to designate such banks using a simple leverage ratio that is somewhere in the range of 8-to-10 percent. If regulators choose 8 percent, approximately 95 per- cent of banks under $10 billion could be eligible for the relief. If they opt for 10 percent, only two-thirds of those banks would qualify. Industry advocates believe 8 percent is a logical and appropriate threshold – and it is important that bankers get involved to make the case to regulators. As work continues to implement S. 2155 and other measures still to come, banker involvement and input will be crucial to ensuring the outcome matches the intent. Thank you for your continued support of your banks, your industry and most im- portantly, your customers and communities. n Don Childears President and CEO, Colorado Bankers Association S. 2155 Is Just the First Step