Kelly Sloan, The Business Times
U.S. Rep. Scott Tipton has introduced legislation to ease some of the regulatory burden on smaller community banks.
The Small Bank Exam Cycle Reform Act would amend the Federal Insurance Deposit Act to make community banks with assets of less than $1 billion eligible for an 18-month examination cycle rather than have to undergo the exam annually. Only banks with assets of less than $500 million now qualify for the 18-month exam cycle.
Tipton, a Republican who represents the Third Congressional District in Colorado, sits on the House Financial Services Committee. Tipton said the legislation is needed to help smaller community banks reduce the amount of resources dedicated to the examination process and instead focus their resources on “providing vital economic services that help their communities grow and prosper.”
“The thing I heard from visiting with community banks was how much the federal regulatory burden was impacting their business,” Tipton said.
He specifically cited requirements spelled out in the Dodd-Frank Wall Street Reform and Consumer Protection Act. “The mandates in Dodd-Frank are being applied to small local banks as if they were J.P. Morgan.”
Relating an example from Zion Community Bank, Tipton said, “last year’s examination documents totaled around 700 pages. This year they came to 1,200 pages, double-sided.”