OBL Outlines Congress Lame Duck Plans

10/16/24

Lame Duck Plans

While Congress is officially on recess till the November general election, that isn't stopping members of Congress from attempting to set up pathways forward for their legislation. Congress will have roughly 20 legislative days when they return in November before the end of the year, and they will need to be laser focused on only a select few pieces of legislation to get them finished in that short amount of time. Two significant developments have been gaining momentum over the past few weeks and both would have an impact on the banking industry if Congress can coalesce around them.

One new development is to get a Farm Bill finished in lame duck. Congress normally passes a Farm Bill once every five years, and we are due for a reauthorization of several programs covered by the legislation. Farm communities are hurting from the significant draughts throughout the summer, and it has renewed a push from more rural members of Congress to get something done here quickly. While we are supportive of the overarching Farm Bill, there are provisions in the House passed version we advocated against. In the pending legislation there is a provision that would completely exempt the Farm Credit system from complying with the new 1071 small business data collection requirements. This would expand the already uneven playing field between banks and the Farm Credit system, and we will continue to oppose it if it moves forward. Members of the Ag Committee have been open to striping out that language and adding in the Small Lender Act. Which would exempt lenders originating fewer than 500 small business loans in each of the preceding two calendar years from 1071, and limit 1071's application to small businesses with gross annual revenues of $1 million or less. We are currently pursuing that strategy, however getting a $2.5 trillion massive package finished in 20 legislative days seems farfetched.

Another important vehicle is a possible Christmas tree banking bill that seems to be gaining traction. There are several pieces of banking legislation pending in both the House and Senate that we believe could possibly get grouped together into a larger package. Unfortunately, most of the bills that could be added together we oppose, and we might have to oppose legislation even if we like some provisions in the bill. Below, you can find all the pending banking issues we believe could be added together in this package.

• Safer Banking Act- would allow the banking industry to serve the legal cannabis industry. OBL is supportive of this legislation
• Recoup Act- establishes the authority to recover from a senior executive bonus compensation and profits from the sale of securities received during the 24-month period preceding the failure. Federal banking authorities also have the authority at an institution of any size to remove from office a senior executive in cases of gross negligence, breach of fiduciary duty, or failure to carry out specified responsibilities. We are concerned with the unintended consequences of this legislation and how it will make it more difficult to recruit officers and directors for a bank.
• Clarity for Payment Stablecoins Act- establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed monetary value). This bill is a priority for Chairman Patrick McHenry who is retiring at the end of this Congress. We expect him to do everything in his power to get it done before the end of the year. We generally believe the stablecoin industry needs regulation, but the regulatory system established in this bill is not a robust as we believe it needs to be.
• Credit Card Competition Act- would expand the Durbin Amendment to credit cards significantly hurting the current interchange regime. We oppose this legislation and if it is added to any legislative package, it will likely cause it to stall out.

REGULATORY UPDATE

Below is a list of all pending regulatory comments impacting the industry. Please review the list and comment if your institution has feedback, you would like included in the OBL's comment letter.

Comments Due	Title	Agency
12-Dec-24	IRS: Proposed Corporate Alternative Minimum Tax	IRS
30-Oct-24	OCC, Board and FDIC: Request for Comments on the Regulatory Publication and Review under EGRPRA	Board, FDIC, OCC
28-Oct-24	FHFA: Proposed Rule on the 2025-2027 Enterprise Housing Goals	FHFA
22-Oct-24	FDIC: Proposed Expansion of Deposit Broker Definition	FDIC
21-Oct-24	OCC, Board, FDIC, NCUA, CFPB, FHFA, CFTC, SEC, Treasury: Proposed Rule to Standardize Data Submitted to Federal Financial Agencies	Board, CFPB, FDIC, FHFA, CFTC, SEC, NCUA, OCC, Treasury

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