Pub. 7 2017-2018 Issue 5

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S A Word From CBA... L ess than a decade after being blamed for the worst financial crisis since the Great Depression, banks ap - pear to be gaining ground again in Washington. It is remarkable but very welcome that Republicans andDemocrats in Congress are moving to scale back financial regulations imposed after the meltdown. President Trump has recruited financial executives to his administration with a more bal - anced approach. The TreasuryDepartment under his direction has drawn up a number of recommendations for reforming the volume of rules. Lawmakers and regulators are reconsidering policies like loosening mortgage lending restrictions, limiting stress tests, and simplifying capital requirements for smaller banks – among other items. Many of the proposals are targeted rollbacks rather than a wholesale repeal of regulations, but they can have a meaningful impact on the industry and this is the smart way to 1) get them adopted politically now, and 2) preclude another swing of the pendulum back toward more regulation in the future. Many lawmakers, both Republican and Democrat, echo the sentiment that the Dodd/Frank Act rules need reform. Senators fromboth parties have finally reached agreement on a good regulatory reform bill. (S. 2155) The Senate Banking Committee approved the bill, S.2155, in December, by 16-7 (all 12 GOP committee members and four of the 11 Democrats on the committee) and barring unforeseen events it appears the bill can get approved by the Senate, House and White House in January. We are delighted with the recent agreement of four moder- ate Senate Democrats to join all GOP members of the Senate Banking Committee in forging the good (but not great) reg- ulatory reform bill. While the bill doesn’t benefit all banks, none are hurt and many banks especially smaller ones get some significant relief. We believe the regulatory pendulum had swung way too far out of line. In the Dodd/Frank Act, Congress created a hostile framework of laws, and agencies became too restrictive. It appears the pendulum is swinging back in our direction, finally. There is a caveat: While we’ve been told the reg reformbill will be considered by the full Senate in the first several weeks of January 2018, there are massive unresolved federal issues that could interfere with the timing. If delayed too much, the bill could fall victim to the customary quicksand of election years. Further, both friends and especially foes have discussed various amendments to the bill. If any of them succeed that are unacceptable to the moderate Democrats that reached the bipartisan compromise that is S.2155, that could scuttle the compromise and no reg reform bill would result. Likewise, the House may want to put its own stamp on the bill as often is the case, and that too could produce the same result: no reg reform bill. That may especially be true of House Financial Services Committee Chairman Jeb Hensarling who is leaving Congress next year and he may view this as his final opportu - nity to put his stamp on significant legislation. The concern is that his stamp may undo the bipartisan compromise; same result, no bill. 10 Years After The Wall Street Meltdown And Dodd/Frank, Banks Are Making Progress In Washington