WASHINGTON — Sen. Mike Crapo, R-Idaho, unveiled legislation Friday that would require the banking agencies to review Dodd-Frank Act rules as part of a mandated process to assess the relevance of financial rules.
Regulators have moved into the second phase of their pending review — required every 10 years under the 1996 Economic Growth and Regulatory Paperwork Reduction Act — to identify "outdated, unnecessary or unduly burdensome" rules. But critics have raised concerns that the review plan — announced in June — may leave out Dodd-Frank rules, included those drafted by the Consumer Financial Protection Bureau. The consumer agency was created by the 2010 law.
The new bill would require that CFPB and other Dodd-Frank regulations be included as part of the review, although the CFPB is separately required to review its major rules five years after they go into effect. The National Credit Union Administration would also be required to participate. The credit union agency completed a review a decade ago and has said it will again, but it is not required by EGRPRA to do so.
"Rather than predetermine which rules should or should not be reviewed, this legislation will require the federal financial regulators to review all existing regulations, including Dodd-Frank and CFPB rules," said Crapo in a press release. "Crushed under an ever-increasing regulatory burden, this review is only meaningful if we identify the biggest challenges for community banks and credit unions and provide real solutions."
The legislation would also expand the scope of the review to include rules that impact all financial institutions, not just insured depository institutions.
Lawmakers raised the issue of excluding Dodd-Frank and CFPB rules at a regulatory reform hearing last month, but regulators pushed back, noting that many Dodd-Frank rules are still being put into effect.
"Given that the EGRPRA process is looking at established rules that are outdated and overly burdensome and unnecessary, most of the Dodd-Frank rules that the OCC has been responsible for haven't been implemented yet or haven't taken effect, so it's not, we feel, appropriate to look at those rules at this time," Toney Bland, senior deputy comptroller for midsize and community bank supervision at the Office of the Comptroller of the Currency, said at the Feb. 10 hearing.