The Senate Appropriations Committee yesterday passed by a 16-14 party-line vote a spending bill for fiscal year 2016 that includes the text of the ABA-backed financial reform bill introduced earlier this year by Sen. Richard Shelby (R-Ala.). Shelby’s proposal would provide regulatory relief for community, mid-size and regional banks, tailor the regulatory structure for systemically important banks and begin restructuring within the Federal Reserve System and at Fannie Mae and Freddie Mac.
The appropriations process provides an alternative legislative mechanism for moving the regulatory relief provisions forward, including nearly two dozen measures that are part of ABA’s Agenda for America’s Hometown Banks, many of which have been introduced as standalone measures or in other relief packages in both houses of Congress.
Since Shelby introduced his bill this spring, bankers have used ABA’s grassroots advocacy tool to send more than 1,900 letters encouraging 88 of 100 senators to support the bill. Bankers are encouraged to ask their senators to support the Shelby bill and -- if they have already agreed to do so -- thank them for their support.
The ABIA has a Task Force of members that work on issues related to the CFPB's regulation of insurance products. If you are an ABIA member and would like to learn more about ABIA's work with CFPB to educate them about the bank-insurance industry or join our CFPB Task Force, please contact us and visit our website.
The Department of Labor’s proposal to redefine who counts as a fiduciary under the Employee Retirement Income Security Act overreaches, capturing many people who should not be reasonably considered fiduciaries under ERISA or the Internal Revenue Code, ABA said in a comment letter yesterday. By taking such an overbroad approach, DoL’s proposal would fundamentally disrupt familiar and productive customer relationships, at significant cost and without achieving DoL’s goals.
“If adopted in its current form, the proposal is likely to harm the very plan participants, beneficiaries, and IRA account owners that the department is seeking to protect by making it extremely difficult, complex, and costly -- and in some cases, impossible -- for banks to make available and deliver the products, services, and information necessary, helpful, and appropriate for achieving a financially sound retirement,” ABA said.
The proposed rule would expand the types of retirement advice subject to fiduciary duty to cover anyone receiving compensation for advice that is “individualized or specifically directed” to a retirement plan sponsor, plan participant or individual retirement account owner. Brokers, registered investment advisers, insurance agents and other advisers would be covered by the fiduciary definition.
While the rule would reduce the retirement advice available to consumers, ABA explained, it would also dramatically reshape -- with no basis in evidence -- financial providers’ relationships with institutional investors, who are sophisticated and who should not be targeted by a rulemaking designed to address retail investors. ABA urged DoL to withdraw the proposal and better target its regulatory objectives.
As formally proposed, the Consumer Financial Protection Bureau yesterday finalized Oct. 3 as the new effective date for the TILA-RESPA integrated disclosures. The bureau attributed its decision in part to an administrative error in which it failed to notify Congress 60 days prior to the rule taking effect as required by law but also acknowledged that “moving the effective date may benefit both industry and consumers with a smoother transition to the new rules,” as ABA had advocated.