Banking Agencies Continue EGRPRA Mandated Reg Burden Review

First Request for Comments - June 16, 2003
Second Request for Comments - January 21, 2004
Third Request for Comments - July 20, 2004
Fourth Request for Comments - February 3, 2005
Fifth Request for Comments - August 11, 2005
Sixth Request for Comments - January 4, 2006

Agencies Publish 6th EGRPRA Request for Comments for Regulatory Burden Reduction

ABA Comment letter filed, April 3, 2006
Federal Register

The Agencies have now published in the Federal Register of January 4, 2006, the 6th and final request for comments on how to reduce regulatory burden in bank regulation. This 6th request relates to the Agencies' regulations on Prompt Corrective Action that require the Agencies to apply specific sanctions and requirements on insured depository institutions as they become undercapitalized, and the regulations implementing the Community Reinvestment Act Sunshine Act that require public disclosure of and information reporting on certain CRA agreements between banks and community groups.

Issues to consider for comment include whether a statutory change is needed to reduce the burden, whether the regulations are consistent with their statute of authority, what are the most burdensome reporting requirements and are any of them unnecessary, and how might the burden be lessened on small institutions.


Fifth Request for Comments - August 11, 2005

ABA Comment Letter, November 9, 2005

This comment period requests comments on regulations on Banking Operations; Directors, Officers and Employees; and Rules of Procedure. Comments are due November 9, 2005.

Issues to consider for comment include whether a statutory change is needed to reduce the burden, whether the regulations are consistent with their statute of authority, what are the most burdensome reporting requirements and are any of them unnecessary, and how might the burden be lessened on small institutions. 

1. Banking Operations

A. Interagency Prohibition of Payment of Interest on Demand Deposits
B. OCC Assessment of Fees
C. OCC Bank Operations
D. FRB Availability of Funds and Collection of Checks
E. FRB Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers Through Fedwire
F. FRB Reimbursement for Providing Financial Records; Recordkeeping Requirements for Certain Financial Records
G. FRB Reserve Requirements of Depository Institutions
H. FRB Payment System Risk Reduction Policy
I. FDIC Assessments
J. FDIC Assessment of Fees upon Entrance to or Exit from the Bank Insurance Fund or the Savings Association Insurance Fund
K. FDIC Determination of Economically Depressed Regions
L. OTS Assessment and Fees

2. Directors, Officers and Employees

A. Interagency Disclosure of Financial Information
B. Interagency Golden Parachute and Indemnification Programs
C. Interagency Limits on Extensions of Credit to Executive Officers, Directors and Principal Shareholders; Related Disclosure Requirements
D. Interagency Management Official Interlocks
E. OCC Bank Activities and Operations - Corporate Practices
F. OTS Board of Directors
G. OTS Bond Coverage
H. OTS Employment Contracts, Compensation, Pension Plans
I.OTS Restrictions on Transactions with Officers, Directors and Others

3. Rules of Procedure

A. Interagency Uniform Rules of Practice and Procedure
B. OCC Voluntary Liquidation
C. FDIC Resolution and Receivership Rules
D. FDIC Restrictions on Sale of Assets by the Federal Deposit Insurance Corporation
E. OTS Investigative Proceedings and Formal Examinations
F. OTS Possession by Conservators and Receivers for Federal and State Savings Associations
G. OTS Removals, Suspensions and Prohibitions Where a Crime is Charged or Proven

Fourth Request for Comments - February 3, 2005

ABA Comment Letter, May 4, 2005. This comment period requests comments on the following regulations (ABA staff contact and email is listed by each regulation)

Money Laundering, Safety and Soundness, and Securities Regulations

1. Money Laundering -- Compliance staff

A. Bank Secrecy Act Compliance
B. Reports of Crimes or Suspected Crimes

2. Safety and Soundness -- Compliance staff

A. Appraisal Standards -- Compliance staff
B. Frequency of Safety and Soundness Examination -- Compliance staff
C. Lending Limits -- Compliance staff
D. Real Estate Lending Standards -- Compliance staff
E. Security Devices & Procedures -- Compliance staff
F. Standards for Safety & Soundness -- Compliance staff
G. Transactions with Affiliates -- Compliance staff
H. OCC OREO (Other RE Owned) -- Compliance staff
I. FRB Reg A (credit from Federal Reserve Banks) -- Compliance staff
J. FRB Limits on Interbank Liabilities -- Compliance staff
K. FDIC Annual Independent Audits -- Donna Fisher
     & Reporting Requirements -- Compliance staff
L. FDIC Unsafe & Unsound Banking Practices (Standby Letters of Credit Brokered Deposits) -- Compliance staff
M. OTS Audits of Savings Associations -- Compliance staff
     & Holding Companies -- Donna Fisher
N. OTS Financial Management Policies -- Compliance staff
O. OTS Additional Limits on Lending& Investment -- Compliance staff

3. Securities -- Compliance staff

A. Banks as Registered Clearing Agencies
B. Banks as Securities Transfer Agents
C. Government Securities Sales Practices
D. Recordkeeping and Confirmation of Securities Transactions by Banks
E. Reporting Requirements for Reported Securities Under the Exchange Act of 1934
F. OCC and OTS Securities Offerings
G. OCC Municipal Securities Dealers Activities of National Banks -- Compliance staff
H. FRB Regulation U (Credit for Margin Stock)
I. OTS Accounting Requirements/Financial Statements -- Donna Fisher
J. OTS Proxies
K. OTS Rules on Issuance and Sale of Institution Securities

Issues to consider for comment include whether a statutory change is needed to reduce the burden, whether the regulations are consistent with their statute of authority, what are the most burdensome reporting requirements and are any of them unnecessary, and how might the burden be lessened on small institutions.

The Agencies ask the following questions on each of these regulations:
  • Is there a need for statutory change?
  • Is there still a need for the regulations and do they meet their purpose?
  • Should there be changes in the overarching approaches/flexibility of theregulatory standards?
  • Is there an effect of the regulations on competition, and can it be mitigated?
  • What is the burden of reporting, recordkeeping and disclosure requirements andcan it be reduced?
  • Do any of the regulations impose inconsistent or redundant regulatory requirements?
  • Are the regulations and the underlying statutes drafted in clear and easily understood language?
  • Should any regulations should be amended or rescinded in order to minimize any significant economic impact on a substantial number of small insured institutions?

Third Request for Comments - July 20, 2004

ABA Comment Letter, October 14, 2004. This comment period requests comments on the following regulations (ABA staff contact and email is listed by each regulation):

Consumer Protection: Account/Deposit Relationships and Miscellaneous

Consumer Protection in Sales of Insurance

Privacy of Consumer Financial Information
Prohibition Against Use of Interstate Branches Primarily for Deposit Production
Safeguarding Customer Information -- Nessa Feddis
Electronic Fund Transfers – Reg E -- Nessa Feddis
Truth In Savings -- Nessa Feddis
Advertisement of Membership
Deposit Insurance Coverage -- Cris Naser
Notification of Changes of Insured Status -- Cris Naser
Advertising – OTS -- Rich Riese
Tying Restriction Exception – OTS -- Rich Riese

Second Request for Comments

Bankers at the five outreach meetings conducted by the Agencies in 2003 clearly felt that the most burdensome regulations were the consumer protection ones. In response, the Agencies are requesting comments on consumer protectionregulations in two segments rather than one, as originally proposed. Comments on the first segment, Consumer Protection: Lending-Related Rules, are nowrequested as part of Phase 2 of the EGRPRA review, published in the Federal Register on January 21, 2004. See ABA's comments on the second request. ABA believes that bankers need to comment on these requests.

Please see the editorial from Richard Harvey, First Vice President, Regulatory Analysis Manager,Washington Mutual Bank (WAMU).

The regulations under review are:
ABA has assigned specific staff to work on these regulations and any comments that you have should be emailed to them using the links below.

Interagency Rules - Compliance staff

1. Fair Housing
2. Loans in Identified Flood Hazard Areas
3. Unfair or Deceptive Acts

Board Regulations

4. Consumer Leasing (Regulation M) -- Nessa Feddis
5. Equal Credit Opportunity (Regulation B) -- Nessa Feddis
6. Home Mortgage Disclosure Act (Regulation C)
7. Truth-in-Lending (Regulation Z) -- Nessa Feddis

First Request for Comments

As part of the June 16 publication, the Agencies requested comments on three categories of regulations: (1) Applications and Reporting, (2) Powers and Activities, and (3) International Operations. The Agencies state that "[c]omments that cite particular provisions or language, and provide reasons why such provisions should be changed, would be most helpful to the Agencies' review efforts. Suggested alternative provisions or language, where appropriate, would also be helpful. If the implementation of a comment would require modifying a statute that underlies the regulation, the comment should, if possible, identify the needed statutory change."

See ABA's comments on the proposed regulatory review process and the first three categories of regulations for review.


The Agencies have begun a three-year program of review to find ways to reduce regulatory burden and to make recommendations to Congress for legislative change, if the statutes will not allow the Agencies to reduce the burden. ABA believes this is an important effort and urges bankers to respond to the Agencies' requests for comment.

Section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of1996 (EGRPRA) requires federal agencies to review their regulations at least once every 10 years. The banking agencies have decided to coordinate their first EGRPRA review and have set up a single website for providing information and soliciting comment. This is projected to be a three-year joint effort by the Agencies, under the umbrella of the Federal Financial Institutions Examination Council (FFIEC) to obtains uggestions from the industry and public on more streamlined and less burdensome ways to regulate. See Interagency Announcement.

While John Reich, Vice Chair, FDIC, will lead the project, the heads of all five of the FFIEC Agencies are personally involved in the process.

To start the review, the Agencies held five banker outreach meetings in 2003:

  • June 11-- Orlando, FL
  • June 26 -- St. Louis, MO
  • July 15 -- Denver, CO
  • September 18 -- San Francisco, CA
  • October 15 -- New York, NY

EGRPRA requires the agencies to categorize the regulations, publish the categories for comment, report to Congress on any significant issues raised by the comments, including recommendations for legislative changes, and eliminate unnecessary regulations. The Agencies intend to seek public comment on 12 categories of regulations that impose burden on banks and savings associations between now and 2006.

While most bankers have seen previous efforts at regulatory relief come and go without noticeable effects while the overall level of regulatory burden has kept rising, bankers and regulators are more optimistic about this effort, since it arises from a Congressional mandate enacted partly at the request of the banking industry. Given the avalanche of new burdens imposed on banks and savings associations in just the last several years, relief from the burden is critical. Recent additions to the burden include massive new HMDA reporting requirements, annual privacy notices, and massive new U. S. Patriot Act requirements, including customer identification programs, mandated responses to urgent law enforcement information requests, etc., etc.

As noted by FDIC Chairman Don Powell at the kick-off press conference, "From my own personal experience as a banker, I know all too well the heavy regulatory burden borne by the banking industry. Through the EGRPRA Program, we will be able to identify and eliminate unnecessary and antiquated government rules and cut through some of the red tape that weighs heavily on bankers today. … I am confident the EGRPRA Program will succeed in bringing forth change that will benefit the industry and regulators."

House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit held a hearing on "Cutting Through the Red Tape: Regulatory Relief for America's Community-Based Banks " on Wednesday, May 12, 2004. ABA's Bradley Rock, President and CEO of Bank of Smithtown, NY, and Vice Chairman of the ABA's Government Relations Council and a member of the Community Bankers Council, testified on the enormous burden on community banks and the punishing effect of this burden, identifying a number of specific problems. Also, FDIC Vice Chairman John Reich gave compelling testimony about the extent and impact of this reg burden on community banks.

2006 Regulations Chart
ABA Comment Letters
Federal Register