,,ii ,calendar ,no4 #cb #aaith ,,congress #ast ,session ,s4 #hge ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #f1 #bjbe,mr4 ,scott of ,south ,carolina 7for himself1 ,mr4 ,crapo1 ,mr4 ,rounds1 ,mr4 ,tillis1 ,mr4 ,kennedy1 ,mr4 ,hagerty1 ,ms4 ,lummis1 ,mrs4 ,britt1 ,mr4 ,ricketts1 ,mr4 ,cramer1 ,mr4 ,moreno1 ,mr4 ,mc,cormick1 and ,mr4 ,banks7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,march #ah1 #bjbe,reported under authority of the order of the ,senate of ,march #ad1 #bjbe1 by ,mr4 ,scott of ,south ,carolina1 with an amendment,strike out all after the enacting clause and insert the part printed in italic ,a ,,bill ,to curtail the political weaponization of ,federal banking agencies by eliminating reputational risk as a component of the supervision of depository institutions4 #a4 ,short title ,this ,act may be cited as the ,financial ,integrity and ,regulation ,management ,act or the ,,firm ,act4 #b4 ,findings2 purposes 7a7 ,findings ,congress finds that-- 7#a7 the primary objective of financial regulation and supervision by the ,federal banking agencies is to promote safety and soundness of depository institutions2 7#b7 all federally legal businesses and law-abiding citizens regardless of political ideology should have equal opportunity to obtain financial services and should not face unlawful discrimination in obtaining such services2 7#c7 financial service providers are private entities entitled to provide services to whichever customers they so choose1 provided that those decisions do not violate the law2 7#d7 financial service providers should strive to ensure that all business decisions are based on factors free from unlawful prejudice or political influence2 7#e7 the use of reputational risk in supervisory frameworks encourages ,federal banking agencies to regulate depository institutions based on the subjective view of negative publicity and provides cover for the agencies to implement their own political agenda unrelated to the safety and soundness of a depository institution2 7#f7 ,federal banking agencies have in fact used reputational risk to limit access of federally legal businesses and law-abiding citizens to financial services in #bjah when the ,federal ,deposit ,insurance ,corporation acknowledged that the agency used reputational risk reviews to limit access to financial services by certain industries1 commonly known as ,operation ,choke ,point2 7#g7 reputational risk does not appear in any statute and is an unnecessary and improper use of supervisory authority that does not contribute to the safety and soundness of the financial system4 #c4 ,definitions ,in this ,act3 7#a7 ,depository institution ,the term depository institution-- 7,a7 has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 includes an insured credit union4 7#b7 ,federal banking agency ,the term ,federal banking agency-- 7,a7 has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 includes-- 7i7 the ,national ,credit ,union ,administration2 and 7ii7 the ,bureau of ,consumer ,financial ,protection4 7#c7 ,insured credit union ,the term insured credit union has the meaning given the term in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb74 7#d7 ,reputational risk ,the term reputational risk means the potential that negative publicity or negative public opinion regarding an institution's business practices1 whether true or not1 will cause a decline in confidence in the institution or a decline in the customer base1 costly litigation1 or revenue reductions or otherwise adversely impact the depository institution4 #d4 ,removal of reputational risk as a consideration in the supervision of depository institutions ,each ,federal banking agency shall remove from any guidance1 rule1 examination manual1 or similar document established by the agency any reference to reputational risk1 or any term substantially similar1 regarding the supervision of depository institutions such that reputational risk1 or any term substantially similar1 is no longer taken into consideration by the ,federal banking agency when examining and supervising a depository institution4 #e4 ,prohibition ,no ,federal banking agency may engage in any activity concerning or related to the regulation1 supervision1 or examination1 of the reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution1 including-- 7#a7 establishing any rule1 regulation1 requirement1 standard1 or supervisory expectation concerning or related to the reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution whether binding or not2 7#b7 conducting any examination1 assessment1 data collection1 or other supervisory exercise concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution2 7#c7 issuing any examination finding1 supervisory criticism1 or other supervisory or examination communication concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution2 7#d7 making any supervisory ratings decision or determination that is based1 in whole or in part1 on any matter concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution2 and 7#e7 taking any formal or informal enforcement action that is based1 in whole or in part1 on any matter concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution4 #f4 ,reports ,not later than #ahj days after the date of enactment of this ,act1 each ,federal banking agency shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report that-- 7#a7 confirms implementation of this ,act2 and 7#b7 describes any changes made to internal policies as a result of this ,act4 #a4 ,short title ,this ,act may be cited as the ,financial ,integrity and ,regulation ,management ,act or the ,,firm ,act4 #b4 ,findings ,congress finds that-- 7#a7 the primary objective of financial regulation and supervision by the ,federal banking agencies is to promote the safety and soundness of depository institutions2 7#b7 all federally legal businesses and law-abiding citizens regardless of political ideology should have equal opportunity to obtain financial services and should not face unlawful discrimination in obtaining such services2 7#c7 financial service providers are private entities entitled to provide services to whichever customers they so choose1 provided that those decisions do not violate the law2 7#d7 financial service providers should strive to ensure that all business decisions are based on factors free from unlawful prejudice or political influence2 7#e7 the use of reputational risk in supervisory frameworks encourages ,federal banking agencies to regulate depository institutions based on the subjective view of negative publicity and provides cover for the agencies to implement their own political agenda unrelated to the safety and soundness of a depository institution2 7#f7 ,federal banking agencies have in fact used reputational risk to limit access of federally legal businesses and law-abiding citizens to financial services in #bjah when the ,federal ,deposit ,insurance ,corporation acknowledged that the agency used reputational risk reviews to limit access to financial services by certain industries1 commonly known as ,operation ,choke ,point2 and 7#g7 reputational risk does not appear in any statute and is an unnecessary and improper use of supervisory authority that does not contribute to the safety and soundness of the financial system4 #c4 ,definitions ,in this ,act3 7#a7 ,depository institution ,the term depository institution-- 7,a7 has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 includes an insured credit union4 7#b7 ,federal banking agency ,the term ,federal banking agency-- 7,a7 has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 includes-- 7i7 the ,national ,credit ,union ,administration2 and 7ii7 the ,bureau of ,consumer ,financial ,protection4 7#c7 ,insured credit union ,the term insured credit union has the meaning given the term in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb74 7#d7 ,reputational risk ,the term reputational risk means the potential that negative publicity or negative public opinion regarding an institution's business practices1 whether true or not1 will cause a decline in confidence in the institution or a decline in the customer base1 costly litigation1 or revenue reductions or otherwise adversely impact the depository institution4 #d4 ,removal of reputational risk as a consideration in the supervision of depository institutions ,each ,federal banking agency shall remove from any guidance1 rule1 examination manual1 or similar document established by the agency any reference to reputational risk1 or any term substantially similar1 regarding the supervision of depository institutions such that reputational risk1 or any term substantially similar1 is no longer taken into consideration by the ,federal banking agency when examining and supervising a depository institution4 #e4 ,prohibition ,no ,federal banking agency may engage in any activity concerning or related to the regulation1 supervision1 or examination1 of the reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution1 including by-- 7#a7 establishing any rule1 regulation1 requirement1 standard1 or supervisory expectation concerning or related to the reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution whether binding or not2 7#b7 conducting any examination1 assessment1 data collection1 or other supervisory exercise concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution2 7#c7 issuing any examination finding1 supervisory criticism1 or other supervisory or examination communication concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution2 7#d7 making any supervisory ratings decision or determination that is based1 in whole or in part1 on any matter concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution2 and 7#e7 taking any formal or informal enforcement action that is based1 in whole or in part1 on any matter concerning or related to reputational risk1 or any term substantially similar1 or the management thereof1 of a depository institution4 #f4 ,taking account of institutions with low operational risk 7a7 ,tailoring regulation to business model and risk 7#a7 ,definitions ,in this subsection-- 7,a7 the term ,federal financial institutions regulatory agency means the ,office of the ,comptroller of the ,currency1 the ,board of ,governors of the ,federal ,reserve ,system1 the ,federal ,deposit ,insurance ,corporation1 the ,national ,credit ,union ,administration1 and the ,bureau of ,consumer ,financial ,protection2 and 7,b7 the term regulatory action-- 7i7 means any proposed1 interim1 or final rule or regulation2 and 7ii7 does not include any action taken by a ,federal financial institutions regulatory agency that is solely applicable to an individual institution1 including an enforcement action or order4 7#b7 ,consideration and tailoring ,for any regulatory action occurring after the date of enactment of this ,act1 each ,federal financial institutions regulatory agency shall-- 7,a7 take into consideration the risk profile and business models of each type of institution or class of institutions subject to the regulatory action2 and 7,b7 tailor the regulatory action applicable to an institution1 or type of institution1 in a manner that limits the regulatory impact1 including cost1 human resource allocation1 and other burdens1 on the institution or type of institution as is appropriate for the risk profile and business model involved4 7#c7 ,factors ,to consider ,in carrying out the requirements of paragraph 7#b71 each ,federal financial institutions regulatory agency shall consider-- 7,a7 the aggregate impact of all applicable regulatory actions on the ability of institutions to flexibly serve their customers and local markets after the date of enactment of this ,act2 7,b7 the potential impact that efforts to implement the applicable regulatory action and third-party service provider actions may work to undercut efforts to tailor the regulatory action described in paragraph 7#b77;,b72 and 7,c7 the statutory provision authorizing the applicable regulatory action1 the congressional intent with respect to the statutory provision1 and the underlying policy objectives of the regulatory action4 7#d7 ,notice of proposed and final rulemaking ,each ,federal financial institutions regulatory agency shall disclose and document in every notice of proposed rulemaking and in every final rulemaking for a regulatory action how the agency has applied paragraphs 7#b7 and 7#c74 7#e7 ,limited look-,back application 7,a7 ,in general ,each ,federal financial institutions regulatory agency shall-- 7i7 conduct a review of all regulations issued in final form pursuant to statutes enacted during the period beginning on the date that is #g years before the date on which this ,act is introduced in the ,senate and ending on the date of enactment of this ,act2 and 7ii7 apply the requirements of this subsection to the regulations described in clause 7i74 7,b7 ,revision ,any regulation revised under subparagraph 7,a7 shall be revised not later than #c years after the date of enactment of this ,act4 7#f7 ,reports to ,congress ,not later than #a year after the date of enactment of this ,act1 and annually thereafter1 each ,federal financial institutions regulatory agency shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report on the specific actions taken to tailor the regulatory actions of the ,federal financial institutions regulatory agency pursuant to the requirements of this subsection4 7b7 ,short-form call reports for all banks eligible for the community bank leverage ratio ,the appropriate ,federal banking agencies1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac71 shall promulgate regulations establishing a reduced reporting requirement for all banks eligible for the ,community ,bank ,leverage ,ratio1 as defined in section #bja7;a7 of the ,economic ,growth1 ,regulatory ,relief1 and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecga note71 when making the first and third report of condition of a year1 as required by section #g7;a7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahag7;a774 7c7 ,report to ,congress on modernization of supervision ,not later than #ah months after the date of enactment of this ,act1 the appropriate ,federal banking agencies1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac71 in consultation with ,state bank supervisors1 shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report on the modernization of bank supervision1 including the following factors3 7#a7 ,changing bank business models4 7#b7 ,examiner workforce and training4 7#c7 ,the structure of supervisory activities within banking agencies4 7#d7 ,improving bank-supervisor communication and collaboration4 7#e7 ,the use of supervisory technology4 7#f7 ,supervisory factors uniquely applicable to community banks4 7#g7 ,changes in statutes necessary to achieve more effective supervision4 #g4 ,reports ,not later than #ahj days after the date of enactment of this ,act1 each ,federal banking agency shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report that-- 7#a7 confirms implementation of this ,act2 and 7#b7 describes any changes made to internal policies as a result of this ,act4 ,march #ah1 #bjbe,reported with an amendment