Republicans spell out demands for bank regulators

WASHINGTON — Leading Republicans on the House Financial Services Committee released a flurry of letters to key bank regulators asking for them to rescind or alter rulemaking from the Biden administration. 

Lawmakers, led by Rep. French Hill, the chairman of the House Financial Services Committee, wrote to the heads of several financial regulators — including the Treasury Department, Federal Deposit Insurance Corp., Federal Reserve, Office of the Comptroller of the Currency and Consumer Financial Protection Bureau — with a laundry list of bank regulations they would like to see rolled back or done away with under the Trump administration. 

For all the prudential regulators, the lawmakers asked that they roll back the revamped Community Reinvestment Act, a 1977 anti-redlining law that bank regulators updated the implementation rules for in October 2023. The Fed, the FDIC and the OCC already said that they plan to rescind the CRA rule and revert to previous standards. 

For the Fed, the lawmakers also asked that the central bank “go back to the drawing board” on Basel III endgame standards, and delay a long-term debt rule until Basel III requirements are figured out. The Republicans also said that the Fed and other regulators should rescind a 2023 guidance on managing third-party relationships that lays out the framework for how banks and fintechs interact. 

To acting CFPB Director Russell Vought — whose leadership at the CFPB is the subject of a federal court case that has resulted in a preliminary injunction against layoffs and other restructuring of the bureau — the lawmakers asked that the bureau rescind rules to amend Regulation V, banning consumer reporting agencies to considering medical debt on credit reports, and one capping the overdraft fees charged by large banks. 

Both of those rules are the subject of Congressional Review Act resolutions. If those resolutions are passed by both chambers of Congress and signed by President Donald Trump, they would be nullified and the bureau would be unable to pass a substantially similar rule in the future. 

Other rules from the CFPB should be withdrawn, the Republican lawmakers said, especially those done in the lame-duck period between the 2024 elections and Trump’s inauguration. Those rules include several to do with consumer reporting from credit agencies, including one that expanded the definition of identity theft. 

Another letter to the acting FDIC head Travis Hill asked that the agency roll back or significantly modify rules that would reinstate a 2012 rule on resolution plans for banks with more than $100 billion in assets, to rewrite recordkeeping standards for bank deposits received from nonbank third parties and the updates to the FDIC industrial loan company regulations. 

“These actions have motivated further bank consolidation, reduced banks’ ability to innovate, and undermined banks’ efforts to serve new and existing customers,” the lawmakers said. “The result is fewer banking products and services available for American families, farmers, and small businesses.” 

The FDIC’s policy and guidances on enhanced resolution planning and nonsufficient fund fees have “may have violated’ the Administrative Procedure Act by “subverting the notice-and-comment process

to impose new legally binding requirements for financial institutions,” the lawmakers said. 

To Treasury Secretary Scott Bessent, the Republican representatives asked that as head of the Financial Stability Oversight Council, Bessent reconsider the ability of the body to designate nonbank companies as systemically important — a tool briefly revived but not used during the Biden administration.