All Things FinReg


If the US Congress can deal with conflicts minerals in banking legislation as it did in the Dodd-Frank Act, surely there can be nothing odd about inserting banking legislation in a highway funding bill.

This is precisely what Congress has done today in passing the Fixing America’s Surface Transportation Act (H.R. 22) (FAST Act), the government’s long-term (and egregiously overdue) federal highway funding bill. The FAST Act, which has been sent to President Obama for signature, contains a number of provisions that provide varying levels of regulatory relief, primarily to smaller financial institutions. This relief, however, does not come free of charge, inasmuch as Congress has decided to ask the banking industry to help fund the FAST Act’s transportation-related appropriations.

The regulatory relief that the financial services industry obtained in the legislation includes the following:

  • Removing the requirement for annual Gramm-Leach-Bliley Act privacy notices for financial institutions that do not change their nondisclosure policies and practices.
  • Raising the dollar thresholds for banks to qualify for the small bank 18-month examination cycle.
  • Creating an application process for the Consumer Financial Protection Bureau (CFPB) to designate rural areas that qualify for less stringent treatment under the CFPB’s qualified mortgage rules.
  • Allowing privately insured state credit unions to become Federal Home Loan Bank members.
  • Equalizing the Securities Exchange Act issuer registration thresholds for bank holding companies and savings and loan holding companies.

The “toll” that the banking industry must pay for this relief consists primarily of reductions on the dividends that are paid on Federal Reserve Bank stock for banking organizations with more than $10 billion of total consolidated assets (as adjusted for inflation going forward). In addition, the legislation will lower the Federal Reserve Banks’ capital reserve account to $10 billion, allowing excess capital funds to be transferred to the Treasury Department for general use.

The full (and very long) FAST Act text is available at Readers should turn to Title 32 and Division G of the legislation for the banking and financial services provisions.