Dive Brief:

• The country’s smallest banks aren’t happy with the way regulators are reducing their reporting burden as Congress asked them to do in legislation enacted last year.
• The Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted in May of 2018, directed federal banking regulators to let banks with assets of $5 billion or less file scaled-back reports for the first and third quarter reporting periods. For the second and fourth periods, they’re to keep filing their regular reports. 
• However, what the agencies came back with is not even close to what Congress intended, says Chris Cole, executive vice president and senior regulatory counsel for the Independent Community Bankers of America. “What they’ve done is hardly anything for the smallest banks,” says Cole.

Dive Insight:

Under the rule put out jointly a few weeks ago by the three agencies with jurisdiction over the small banks — the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and Federal Reserve — banks with assets of between $1 billion and $5 billion can use what’s known as the Federal Financial Examinations Institutions Council (FFIEC) 051 Call Report for the first and third reporting periods. It’s the most streamlined form available and the smallest banks — those under $1 billion in assets — are already using it.

The agencies say it will take the banks about 51 hours to prepare the reports for the first and third quarters, down from about 64 hours, an almost 13-hour reduction in time for each of the two quarters.

Cole says that’s a meaningful decrease for these banks but because the smallest banks — those under $1 billion in assets — already use the form, that change doesn’t help them at all. What the agencies have done for these smallest banks is reduce in very small ways some additional line items, but these reductions only amount to minimal trims, reducing preparation time only by about 1.8 hours.

“It’s really nothing,” Cole says. “What we want for these banks is that it be a truly short form, and not this.” 

In a statement it released a few weeks ago, ICBA says all banks under $5 billion in assets, when filing their first and third quarter reports, should just have to include their balance sheet, income statement, and statement of changes in shareholders’ equity without any other supporting schedules. That’s the kind of reduced regulatory burden Congress intended and that’s what banks will continue to seek, Cole says. “As long as they keep listening we’ll keep pushing for it.”

The new requirements go into effect in 2020.