Better Markets filed a Comment Letter with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board in response to the joint notice of regulatory review under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA).
Why It Matters. EGRPRA requires the Federal Financial Institutions Examination Council (Council) and the financial regulatory agencies to periodically review of all regulations prescribed by the Council. The Agencies categorize the regulations at least every 10 years, provide public notice, and solicit public comment. The public is asked to identify areas of the regulations that are outdated, unnecessary, or unduly burdensome. In this Regulatory Review, the Agencies were seeking comment on regulations in three categories:
- Consumer Protection
- Directors, Officers, and Employees
- Money Laundering.
What We Said.
- Consumer Protection:
- We strongly support efforts by the FDIC to expand deposit insurance coverage to include certain small business transaction accounts. This coverage would add meaningful stability in the event of financial stress and protect Main Street Americans and businesses while at the same time not adding unreasonable costs or exacerbating the moral hazard problem. Read more here.
- The regulations related to the advertisement of FDIC insurance coverage should be changed to increase the accountability for misleading statements and advertisements by both banks and fintech companies that partner with banks. The implicit free pass for first-time offenders should also be removed. Read more here.
- Directors, Officers, and Employees:
- The Agencies should strengthen enforceable rules and guidelines that hold boards of directors accountable for the safe and sound operations of banks and fulfilling their fiduciary duties. This is particularly necessary for banks that are large and systemically important, as these can disrupt financial stability, harm Main Street Americans, and cost taxpayers billions of dollars in the event of bank failures. Read more here.
Bottom Line. Financial regulations are vital to protect Main Street Americans and financial stability. Better Markets welcomes this opportunity to contribute to the review of these regulations and encourages the Agencies to implement changes as soon as practicable.
