The Highway Funding Bill ‒ Compromises, Amendments and Possible Regulatory Relief

Happy Veterans Day to all who serve or have served. This great country, an experiment in democracy, continues to survive and thrive because of the sacrifices of millions of individuals who have answered the call to defend and serve her. Thank you for your service, and God bless you all!

Last week was a good week for the business of banking in our nation’s capital. The highway funding bill, which contained bank-related provisions in both the House and Senate versions, passed the House on Thursday, but the language that would have lowered the interest paid on capital held by Federal Reserve-member banks was overwhelmingly amended out. There will now be a conference committee to reconcile differences between the House and Senate versions of the bill, so we are still not out of the woods. However, in a positive twist of fate, also amended into the bill were some important banking regulatory relief measures. Among the 15 regulatory relief measures now included in the House version are the elimination of redundant privacy notice annual notifications, expansion of the 18-month examination cycle for qualifying banks, and equalizing of the SEC registration and de-registration thresholds for savings and loan holding companies.

In addition it was reported that Sen. Richard Shelby, chairman of the Senate Committee on Banking, Housing & Urban Affairs, met behind closed doors with select committee members about a compromise regulatory relief bill that presumably would replace the bill that Shelby had marshaled out of the committee last spring. Among those purportedly to have participated in this important meeting was Sen. Joe Donnelly of Indiana. Sen. Donnelly has been an untiring supporter of bank regulatory relief and has crossed over to vote with Republicans on amendments to the bill passed out earlier. Donnelly additionally has co-sponsored many individual bills that would provide much-needed regulatory relief to banks.

With all of this good news, the IBA is more optimistic regarding the passage of regulatory relief. There are concerns, however, regarding the amount of time available to pass anything in 2015. With few legislative days remaining in this calendar year, passage could slip into next year. Complicating matters is that 2016 is an election year, and a presidential election year at that. Historically little is accomplished in Congress during presidential election years, as congressional members are busy campaigning for both primary and general election victories, which siphons time away from Washington, DC. For this reason, presidential elections shine a bright light on the political process.

The other issue with this particular regulatory relief effort is that it is difficult to see a logical process for replacing the bill that has already passed the Senate Banking Committee with a compromise bill. There is no time to go back through the committee process, and there are few bills that a compromise could be attached to remaining to be voted on. Then there is the question of how the handling of a compromise attachment would be viewed in the House of Representatives. Clearly those of us who represent the banking industry legislatively, and those bankers who work hard to provide grassroots lobbying support, will need to remain vigilant throughout the remainder of 2015 if we are to achieve any degree of success. Yet I know how hard bankers work to serve their communities, and I believe that bankers will step up to the challenge to make 2016 a very Happy New Year.

– S. Joe DeHaven

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