Pub. 7 2017-2018 Issue 5

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 March • April 2018 7 Trump administration and GOP lawmakers focused on boosting economic growth are pushing bank regulatory re- form. In addition to the new tax reform law, Trump has said reducing restrictions on banks will spur lending and allow businesses and the economy to grow. One of the bill's Dem- ocrat co-sponsors, Sen. Jon Tester (D-Mont.), said he wasn't surprised that so many Democrats were signing on to the legislation, viewing it as a way to boost smaller banks. Tester is one of the four moderate Democrats pressing ahead with the bill despite warnings from fellowDemocrats that the rollbacks could endanger consumers. At least 11 Senate Democrats including Colorado’s Sen. Michael Bennet (after years of CBA stressing the arguments), are backing the bill, giving it over 60 votes to block a filibuster. “It's past time," said Tester, one of a number of Democrats up for reelection in red states next November. CBAmet withMontana’s Sen. Tester 18months ago since he was a key member of the Senate Banking Committee and we pushed for reforms including those in the resulting bill. We also discussed Friends of Traditional Banking that was originated by CBA and bankers associations in OK and UT and that was successful in providing major financial support (~$500,000) to CoryGardner here inColorado to replace credit union friend and champion Mark Udall in 2014. Sen. Tester chaired the Democratic Senatorial Campaign Committee to elect Democrats to the Senate and he was very familiar with FOTB and the inroads we were making. Bank regulatory reform and other enhancements of the economy don't make banks the winners althoughmuch of this is welcome, but the winners are the economies, customers and communities who flourish from additional economic growth that bank loan growth can help create. We credit a number of officials in the Trump administration for a friendlier tone with the banking industry. That group in- cludesWhite House National Economic Council Director Gary Cohn, Treasury Secretary Steven Mnuchin, and key staffers they brought on board. On top of these and other factors like the bipartisan Senate bill, Trump installed his conservative budget chief, Mick Mulvaney, at the Consumer Financial Pro- tection Bureau, after CFPB director Richard Cordray resigned abruptly and attempted to pick his own successor. After the onslaught of new regulations for the last eight years, it is time for a thorough review of the regulatory framework. The President’s choices to head key regulatory agencies (Fed, FDIC, OCC) are committed to do their part to make rules more flexible and "tailored." The word “tailor,” now widely used in regulatory agencies, comes from the TAILOR bill which CBA helped instigate and write and our own Rep. Scott Tipton champions as the bill’s lead sponsor. This TAILOR Act (H.R. 1116) still needs our advocacy to get its adoption. It creates an ongoing systematic program requiring that all regulations since DFA and those in the future reflect a bank’s business model and risk profile in lieu of trickle-down big bank rules applied to the whole industry. It mandates annual Congressional review of the required focus on business model/risk profile imposed on the agen - cies’ (Fed, FDIC, OCC, NCUA, CFPB). It also contains other bank-friendly provisions for annual Congressional review such as the necessity, appropriateness, and impact of ap- plying such regulatory action; efforts to limit the regulatory compliance impact, cost, liability risk, and other burdens on institutions serving evolving and diverse customer needs; and the potential unintended impact of examinationmanuals or other regulatory directives. Fed Governor Jerome Powell who Trump nominated to chair the central bank said of the Fed’s internal efforts, “It amounts to making regulation more efficient, protecting the important gains that we’ve made.” S. 2155 and the Fed’s me- thodical approach run against the “fake news” that the Trump administration wants to gut Dodd-Frank. Admittedly, this piecemeal approach falls short of what many Congressional conservatives and many bankers hoped to accomplish under GOP control in Washington. Republicans are limited by their narrow majority in Congress in how far they can undo Dodd-Frank. There are a lot of good people in the administration and Congress who want to make changes. It’s just not clear how and when some of those changes can come about. Congress and the regulators are refining the edges of Dodd-Frank while the core of its framework will remain in place. It's our reality for banking regulation for the foreseeable future – but at least it is in a positive direction. n Don Childears President and CEO Colorado Bankers Association WE’VE GOT YOU COVERED Coan, Payton & Payne, LLC provides a full range of legal services to the banking industry. Together with our clients, we create and implement Rock Solid ® strategies for success. WWW.CP2LAW.COM Denver | Fort Collins | Greeley