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Wednesday, August 1, 2012

ABA Urges HFS to Approve Muni Adviser Bill

ABA yesterday urged the House Financial Services’ Capital Markets Subcommittee to approve Rep. Robert Dold’s (R-Ill.) bill (H.R. 2827) that would clarify what constitutes a municipal adviser and would exempt banks from the Securities and Exchange Commission’s proposed rule implementing the Dodd-Frank Act’s Section 975. The panel is slated to consider the legislation today.

“The SEC’s proposal would require registration and reporting not only by banks, but also by individual bank employees giving ‘advice’ -- a term which is not defined -- with enforcement and examination handled by the SEC instead of by bank regulators,” James Ballentine, ABA EVP for congressional relations, said in a memo.

Ballentine emphasized that the required registration would impose a new and different layer of regulation and examination on banks for no meaningful public purpose. He noted that subcommittee members during a recent hearing on the issue said this was not Congress’ intent when it approved Section 975.

“ABA strongly believes a complete exemption is required [for commercial banks and savings and loan associations] because these institutions provide such a broad array of traditional banking products and services to municipalities that any attempt to categorize them would necessarily be incomplete,” Ballentine said.

“A complete exemption further provides certainty to banks, already subject to comprehensive regulation, that they may continue to serve their communities without triggering unduly burdensome regulation by yet another regulatory entity,” he said.

Read the memo.
Read the bill.

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