“Themes emerging from [the EGRPRA process] include streamlining the Call Report, reducing examination frequency, raising long-standing dollar-based thresholds for appraisals, and reducing the complexity of capital requirements for smaller banks,” Yellen said, noting that the agencies have proposed a streamlined Call Report and have implemented a statute extending the exam cycle for smaller, well-capitalized banks.
She said Congress might also “consider carving out community banks” from the Volcker Rule and Dodd-Frank’s incentive compensation limits. She said:
The risks addressed by these statutory provisions are far more significant at larger institutions than they are at community banks. Community banks and supervisors would benefit from not having to focus on regulatory compliance for matters that are unlikely to pose problems at smaller banks.
Yellen emphasized the “very special role” community banks play in the financial system. “Reducing regulatory burden is important and is something that we will seek to foster using every available tool that we have.”
She also reiterated remarks from Fed Governor Daniel Tarullo earlier this week on options the Fed has proposed or is considering to recalibrate the Comprehensive Capital Analysis and Review process for banks with less than $250 billion in assets.
Read the testimony.