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Banking’s drive for regulatory relief is in chaos. We are experiencing clashes within the Administration, between
the White House and Congress, between Republicans and Democrats and within both parties. Regulatory reform
is a tier 1 issue for us but a tier 2 issue to others, clearly behind the country’s tier 1 issues: healthcare, tax reform,
immigration, trade and infrastructure. Further complicating matters is the lack of a unified vision among
Republicans and the Senate’s 60 vote requirement. As it gets closer to the midterm elections in November 2018,
reg relief for banks will be even more difficult to achieve.

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.

CBA is aggressively advocating for regulatory relief to restore some balance from the excesses of bank regulation.
We have been assured numerous times that it is "going to happen in the first year."

Some reforms can be changed through rule revision by the agencies or executive action by the President, but little
will be done this way. Most reform will require Congressional action and some can be accomplished using
reconciliation, a parliamentary procedure that allows for passing budget legislation (including other substantive
provisions) with only 51 votes in the Senate, rather than the 60 typically needed to overcome a filibuster.

In the Senate where we need 60: with 52 GOP, we need 8 Dems. In 2018, 33 Senators stand for election, 25 of
them Dems, 10 of those in states Trump carried. Senators Crapo (GOP) and Brown (Dem) are negotiating
CHOICE lite, but we can’t just wait so we must press for a package.

CBA PRIORITIES
TAILOR Durbin interchange – killed in House
Portfolio exceptions for QM/ATR CFPB reforms

REGULATORY REFORM OPTIONS
The broad approach of running a package (CHOICE, CLEARR) appears dead while there is potential in individual
stand-alone bills, but few single subject bills can be adopted at best. We need to resurrect a meaningful package.
To get the 8 Dem Senators, we can’t simply hope Crapo/Brown succeed. We need a package of our highest
priorities excluding the items moderate Dems will oppose. We need to get a package bill introduced that our
moderate Dems supposedly will support. In short, we need a few important items excluding ones where moderate
Dems won’t support (shown in grey). That may look like this:
LEGISLATIVE ISSUES
1) TAILOR ACT – “Tailor” regulations to fit an institution’s business model and risk profile.
2) MORTGAGE LENDING – QM and ATR status for loans held in portfolio.
3) CFPB REFORMS
4) TAX REFORM – Lower corporate rate, preserve interest deduction, tax credit unions & FCS – ABA handout
5) DURBIN/INTERCHANGE – Repeal killed in House
6) EXAM APPEAL/REFORM – Exam appeals without fear of reprisals.
7) CREDIT UNIONS (impossible unless part of tax reform): Tax in light of NCUA action when Congress refused
(FoM, MBL cap, supp capital)
8) FCS OVER-REACH (impossible unless part of tax reform) – Stop FCS expansion, unfair competition, tax
exemption.
9) SIFI THRESHOLD – Raise or eliminate “$50 billion.”
10) SMALL BHC – definition raised to <$10 billion in consolidated assets.
11) CONGRESSIONAL REVIEW ACT VETO OF RULES – Congressional Approval Required for Major Rules
and Cost-Benefit Analysis.
1
12) CHEVRON DEFERENCE – End bias toward agencies.
13) WELL-CAPITALIZED – Specified reg relief.

1 CONGRESSIONAL RULES APPROVAL – Requires cost/benefit studies and Congressional approval of major rules: annual
cost>$100 million; major increase in costs/prices for consumers, industries, government or regions; or adverse effects on
competition, employment, investment, productivity, innovation…

Western States Trip | Fall 2017 | Participants’ Guide Page 8.