Federal Bank Regulatory Agencies Seek Comment on Interagency Effort to Reduce Regulatory Burden

Regulatory Developments

Federal Bank Regulatory Agencies Seek Comment on Interagency Effort to Reduce Regulatory Burden

On February 6, the Federal Reserve, FDIC, and OCC (Agencies) jointly published a notice seeking comments on reducing regulatory burdens. The Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) requires federal bank regulatory entities to review their regulations no less than once every ten years in order to identify outdated or unnecessary regulatory requirements. The Agencies grouped the regulations subject to review into 12 categories: Applications and Reporting; Banking Operations; Capital; Community Reinvestment Act; Consumer Protection; Directors, Officers and Employees; International Operations; Money Laundering; Powers and Activities; Rules of Procedure; Safety and Soundness; and Securities.

The Agencies plan to publish four notices, each addressing one or more categories of regulations, over the next two years. This first notice solicits comments on three categories: Applications and Reporting, Powers and Activities, and International Operations. Comments are due by May 6, 2024.

Proposed Revisions to the Consolidated Reports of Condition and Income (Call Report) Related to the Agencies’ Regulatory Capital Proposal

On January 31, the Agencies proposed revisions to Call Report forms, which are required to be submitted by supervised institutions to the Federal Financial Institutions Examination Council (FFIEC), to align with a September 2023 proposed rule by the Agencies to bolster capital requirements for large banks.

Among other things, the proposal would: (1) revise the forms to remove items that the proposed rule would render irrelevant, such as compliance transition periods in the existing reporting rules; (2) revise the forms to align capital calculations for institutions subject to different risk standards under the proposed rule; and (3) require banks subject to the proposed rule’s expanded risk-based approach to file the FFIEC 031 report form. The revised forms would take effect in the third quarter of 2025 and would be posted on the FFIEC’s website.

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Taking Stock of the Private Funds Rules Litigation After Oral Arguments at the Fifth Circuit

On February 5, a three-judge panel of the US Court of Appeals for the Fifth Circuit heard oral arguments on the challenge to the “Private Funds Rules” issued by the Securities and Exchange Commission. The panel consisted of Judges Leslie H. Southwick (a G.W. Bush appointee), Kurt D. Engelhardt (a Trump appointee), and Cory T. Wilson (a Trump appointee) (the “Panel”). A breakdown of the most significant arguments is provided here.

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