Regulators Announce Steps to Reduce Regulatory Burden on Community Banks

The Federal Financial Institutions Examination Council (FFIEC) announced on Tuesday the steps regulators are taking to reduce the reporting burden for community banks by streamlining and simplifying the regulatory reporting process.

The objectives of the initiative to reduce the regulatory burden on community banks are consistent with the feedback the FFIEC has received as part of the regulatory review conducted under the Economic Growth and Regulatory Paperwork Reduction Act (EGPRRA) of 1996, according to the FFIEC.

The federal banking regulatory agencies are seeking comment on proposals they have made to eliminate or revise several data items on Consolidated Reports of Condition and Income (Call Reports) submitted quarterly by banks and savings associations. These reports include data regulators use to monitor each institution's safety and soundness, performance, and risk profile and to target examination resources and support off-site examinations, according to FFIEC. Credit unions would not be affected by the proposed changes, which would simplify reporting requirements for banks and savings associations.

The FFIEC is seeking to find a balance between reporting burden for community banks/savings associations against regulators' need for reliable data to ensure that those institutions are meeting their communities' needs and operating in a safe and sound manner.

In addition to the proposed changes to the reporting requirements, the FFIEC is focusing on four other areas to reduce the burden for community banks and savings associations:

• A sooner review (required by law) of the continued appropriateness of the data items collected in the Call Report;
• Evaluating the feasibility and merits of creating a streamlined version of the quarterly Call Report for community institutions;
• Identifying additional opportunities to reduce reporting burden by revising or redefining Call Report data items, through continuing dialogue with community institutions;
• Explaining upcoming reporting changes and clarifying technical reporting requirements to banks and savings associations via teleconferences and webinars

Comments on Tuesday's proposed changes to data reporting requirements for banks and savings associations will be accepted within 60 days of the publication of the proposed changes in the Federal Register. The individual reporting changes are proposed to take effect with the Call Reports for December 2015 or March 2016, according to FFIEC.

The FFIEC consists of five regulatory agencies: The Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Federal Reserve, the Office of the Comptroller of the Currency, and the National Credit Union Administration.