BPI Responds to Joint Regulatory Review on EGRPRA

Ladies and Gentlemen:

The Bank Policy Institute^[1] is writing in response to the second of four joint notices of regulatory review pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996 ("EGRPRA") issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the "Agencies").^[2] Consistent with the purposes of the EGRPRA review and our prior letter addressing the first notice,^[3] this letter continues our recommendations regarding "outdated or otherwise unnecessary regulatory requirements"^[4] within the categories of regulations currently under review.

As in our prior letter, we also identify overarching regulatory and supervisory trends that demand disproportionate attention to immaterial matters rather than material risks to the safety and soundness of the U.S. banking system. Accordingly, we encourage the Agencies to carefully scrutinize responses to the two new questions addressing the cumulative effects of the current regulatory burden^[5] for this EGRPRA notice, the prior notice, and future notices.

This second notice illustrates the importance of expanding the EGRPRA review to include other agencies that finalize regulations or take other actions affecting banking organizations. A comprehensive review of the regulatory and supervisory framework for "Consumer Protection" and "Money Laundering" cannot be adequately conducted without the full participation of the Consumer Financial Protection Bureau and the Financial Crimes Enforcement Network.

As we noted in our prior letter, the absence of the CFPB from the EGRPRA process is particularly concerning. The Dodd-Frank Act assigned all "consumer financial protection functions" from the federal banking agencies to the CFPB, including "all authority to prescribe rules or issue orders or guidelines pursuant to any Federal consumer financial law"^[6] and "exclusive authority to require reports and conduct examinations" in order to "assess[] compliance with the requirements of Federal consumer financial laws" for insured depository institutions with total assets of more than $10 billion.^[7] While, by all accounts, the Agencies have increased their own consumer protection compliance activity, they do so on a questionable legal basis. To act in accordance with Dodd-Frank the Agencies should respect the CFPB's statutorily mandated role to oversee regulatory and supervisory activity related to consumer protection. Congress should also include the CFPB in the EGRPRA review.

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

[2] See OCC, FRB, FDIC, Regulatory Publication and Review Under the Economic Growth and Regulatory Paperwork Reduction Act of 1996, 89 Fed. Reg. 62,679 (Aug. 01, 2024).

[3] See BPI, Comment on First EGRPRA Notice, (May 6, 2024), https://www.regulations.gov/comment/OCC-2023-0016- 0008.

[4] 89 Fed. Reg. at 62,680.

[5] 89 Fed. Reg. at 62,681.

[6] 12 U.S.C. § 5581(a)-(b) (emphasis added).

[7] 12 U.S.C. § 5515(b)(1).