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Issue Background

OVERVIEW
Every two years, there is a fresh political landscape in Denver and Washington. This year's change is seismic.
Our 45th President of the United States represents Americans' dislike for the status quo, and the reaction to
some Executive Orders is strident. Banking’s drive for regulatory relief will be amid chaos. We will experience
many clashes within the Administration, between the White House and Congress, between Republicans and
Democrats and within both parties. Governing is harder than campaigning when it comes to the ambitious
legislative agenda of President Trump and Congressional Republicans, which includes overhauling the
healthcare system, reforming the tax code, addressing immigration, altering trade policy, boosting
infrastructure spending, rolling back financial regulation. Addressing even one of these complex issues in one
year would be tough. Further complicating matters is the lack of a unified vision among Republicans. If it gets
too close to the midterm elections in November 2018, reg relief for banks will be extremely difficult. It is about
pushing regulatory relief past these huge Tier 1 national issues. But CBA will press forward aggressively
advocating for regulatory relief to restore some balance from the excesses of bank regulation since the
Dodd/Frank Act.

President Trump's “dismantling DFA” is not a priority for the first 100 days, but this Tier 2 issue is a task for
Trump's first year. It is essential we get this accomplished. We have been assured numerous times that it is
"going to happen in the first year," so that it no longer unnecessarily constrains banks' ability to lend to
customers and be efficient.

Some of the law can be dismantled through executive action by Trump. Furthermore, much could be undone
using reconciliation, a parliamentary procedure that allows for passing legislation with only 51 votes in the
Senate, rather than the 60 typically needed to overcome a filibuster. Trump and the Congress give us an
opportunity for regulatory relief; there is no guarantee. CBA will opportunistically pursue all the many issues
banks confront.

Much of the over-regulation constricts the ability to serve customers and denies them the use of credit. Among
those hurt are low income, small businesses, rural residents, recently retired and recently employed. We need
to emphasize that. Regulatory relief shouldn’t be limited to DFA; we need common-sense changes that will
benefit banks' customers and communities.

House Financial Services Committee Chairman Hensarling has introduced the CHOICE Act. While it contains
much of the below, it is important that we clearly state priorities so that we can act quickly with the opportunity
arises.

CBA PRIORITIES:
1) TAILOR ACT – To provide regulatory relief to as many banks as possible and maintain appropriate
regulation where needed, Congress needs to pass the TAILOR Act to tailor regulations to the business
model and risk profile of the bank. CBA was deeply involved in writing it; Rep. Scott Tipton (CO-3) is its
sponsor.

2) MORTGAGE LENDING – QM and ATR status should be conferred automatically for loans held in portfolio;
it is logical and essential to providing credit to various groups currently with constrained access to credit.
The high cost mortgage language and the balloon payment prohibitions in DFA should be eliminated for
banks restoring access to mortgage credit for many Coloradans. We support mortgage cost disclosures
but believe CFPB missed opportunities to truly reform these disclosures: new forms remain lengthy and

ABA Government Relations Summit | Spring 2017 | Participants’ Guide Page 4.