26 Hoosier Banker September 2015 FEATURE About the Author Frank Keating was named president and chief executive officer of the American Bankers Association in 2011. His appointment followed seven years of service as president and CEO of the American Council of Life Insurers and after serving two terms as governor of Oklahoma. Keating’s 30-year career in law enforcement and public service included stints as an FBI agent, U.S. attorney and state prosecutor, and Oklahoma House and Senate member. Author of three award-winning children’s biographies, he earned an undergraduate degree from Georgetown University, a law degree from the University of Oklahoma and is the recipient of five honorary degrees. The author can be reached at: fkeating@aba.com. When we talk about advocacy, most people probably think of Congress ‒ of lawmakers, bill introductions, committee actions and floor votes ‒ perhaps culminating in a signing ceremony at the White House. Yet there’s another type of advocacy that is equally important to our industry: regulatory advocacy. As you well know, how an implementing regulation is drafted, proposed and applied can have a significant impact on your customers, your community and your institution. That’s why the American Bankers Association puts significant effort and resources into shaping the rules that shape your business. We leverage the expertise we have on staff and the knowledge of our member bankers and the state associations to craft detailed and meaningful comment letters on proposals. We supplement our letters with personal meetings with regulatory staff and, when necessary, we get Congress involved. These efforts have produced results ‒ successes that can be found in subtle, yet important, provisions of final and proposed rules. For example the Consumer Financial Protection Bureau ‒ responding to our views ‒ proposed lifting the small originator QM threshold and expanding the definition of rural and underserved areas. It also finalized helpful fixes to the TILA-RESPA mortgage disclosures. Our advocacy on Basel III allowed most banks to opt out of running unrecognized gains and losses through their Basel capital calculations. We also secured a two-year extension of the Volcker Rule’s phase-in on funds investments, and the exclusion of bank custodial operations from the Department of Labor’s proposed “fiduciary” rule. In response to an ABA/state association recommendation, regulators are now considering proposing regulations that would exempt highly capitalized banks from much of Basel III implementation. Our regulatory outreach efforts go beyond the financial regulators, too. Thanks to our regulatory advocacy, the Federal Communications Commission approved a proposal to exempt mobile fraud alerts from Telephone Consumer Protection Act limitations. We will continue to work to reduce other unnecessary burdens associated with arbitrary statutory and regulatory thresholds affecting mid-sized to smaller institutions, as well as to combat “trickle-down” regulation harming thousands of banks. We will remain on guard as the CFPB turns its attention to new areas, including overdraft protection. Sometimes, however, our collective efforts with the agencies are not enough to right-size regulation. The political environment can make regulators skittish about providing relief that, while appropriate, could be second-guessed by Congress. To help persuade them to take action, ABA and the state associations conceived of legislation ‒ introduced in June by Rep. Scott Tipton, R-Colorado, as the TAILOR Act (H.R. 2896) ‒ that would require regulators to tailor rules to a bank’s business model and risk profile. Simply put, it frees regulators to use common sense, applying rules only where appropriate, while cutting back on those that come with high costs and that add little to safety and soundness. Such an approach to regulation is long overdue. ABA’s 2015 Survey of Bank Compliance Officers found that growing regulatory compliance burdens have led nearly half of all banks to reduce their offerings for loan accounts, deposit accounts or other services. And 46 percent said their banks had decided not to launch a product, open a new channel or enter a new market due to compliance concerns. These findings are clear, objective proof that change is needed in order for banks to effectively and successfully serve their customers and communities. Please help us create that change by urging your representatives to cosponsor H.R. 2896. t Tailoring Rules to Help Banks Succeed
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