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Thursday, March 5, 2015

ABA-Advocated Bill Would Avoid Arbitrary SIFI Thresholds

Luetkemeyer also introduced the System Risk Designation Improvement Act, which would eliminate the automatic designation of banks as systemically important based solely on asset size, recognizing that regulators should consider many different components of risk.

ABA President and CEO Frank Keating expressed the association’s strong support for the bipartisan bill, which was introduced yesterday with four Republican and four Democratic co-sponsors and is part of ABA’s Agenda for America’s Hometown Banks. Keating said:

Both lawmakers and bank regulators have recognized that current regulation based solely on asset size ignores careful risk management by banks, creating unnecessary costs and reducing services available to bank customers. A more effective and value-added supervision regime is one that is more fully risk-based and individually tailored, taking into account a wide array of factors, including business model, complexity of operations, charter type and other concerns -- not just an arbitrary asset threshold.

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