Rep. Scott Tipton, R-Cortez, introduced legislation Tuesday aimed at reducing compliance burdens for highly rated community banks.
The Small Bank Exam Cycle Reform Act would amend the Federal Deposit Insurance Act to allow banks with less than $1 billion in assets to be eligible for an 18-month bank examination cycle by the Office of the Comptroller of the Currency.
Under the current law, only banks with assets below $500 million are eligible for the 18-month cycle, while those that do not meet the criteria are required to have an examination every 12 months.
“The most widespread concern that I’ve heard from small banks I’ve met with throughout Colorado, is that increased regulatory compliance burdens have taken vital resources away from running their business operations and providing services to consumers,” Tipton said in a statement.
“This legislation takes a common-sense step to reduce that heavy regulatory burden by allowing additional well-managed community banks – including banks in Colorado’s 3rd District – to take advantage of a longer bank examination cycle,” he said.
Tipton added that his bill would make up to 676 banks around the country eligible for an 18-month exam cycle.
The proposed legislation comes after Tipton heard testimony at a House Committee on Financial Services hearing last week.
Tyrone Fenderson Jr., of the American Bankers, testified that an 18-month cycle for well-managed banks would significantly reduce the resources required to deal with annual examinations for an increased number of banks.
Michael Cipriano is a student at American University in Washington, D.C., and an intern for The Durango Herald.