Bill Details
S.427 - 119th Congress
Status
Latest action
2025-02-05 - Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced Date
2025-02-05
Policy Area
Finance and Financial Sector
Committees
View committees (1)
Sponsors
Cosponsors
8
0
0
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would tell federal banking regulators to make rules and supervision fit the size, risk, and business model of the institutions they regulate. In plain terms, it would push agencies to avoid using one-size-fits-all rules and to consider how new requirements affect costs, staffing, and the ability of banks and credit unions to serve customers and local communities. It would also require regulators to explain how they made those choices, review some past rules, and report to Congress on how bank supervision can be modernized.
- Federal banking and consumer regulators would have to consider the risk level and business model of each type of institution before issuing new rules.
- They would need to tailor rules so the burden on banks, credit unions, and similar institutions is limited when that makes sense for their risk profile.
- When writing proposed or final rules, agencies would have to document how they applied these requirements.
- Each agency would also have to send Congress a yearly report on what it has done to tailor its regulations.
- The bill would require a review of certain regulations issued during the past seven years and, if needed, those rules would have to be revised within three years after the bill becomes law.
- For banks that qualify for the Community Bank Leverage Ratio, regulators would have to create simpler reporting for the first and third quarterly reports each year.
- Banking agencies, working with state bank supervisors, would have to submit a report to Congress on ways to modernize bank supervision, including technology, examiner training, communication with banks, and issues that matter especially to community banks.
Official Summaries
Taking Account of Institutions with Low Operation Risk Act of 2025 or the TAILOR Act of 2025
This bill addresses the supervision of financial institutions.
Federal financial regulatory agencies must (1) tailor any regulatory actions so as to limit burdens on the institutions involved, with consideration of the risk profiles and business models of those institutions; and (2) report to Congress on specific actions taken to do so, as well as on other related issues. The bill's tailoring requirement applies to future regulatory actions and to regulations adopted within the last seven years.
The bill also reduces certain reporting requirements for community banks eligible for a simplified capital leverage ratio.
Finally, federal banking agencies must report on the modernization of bank supervision, including examiner workforce and training and statutory changes necessary to achieve more effective supervision.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 427 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 427
To require the Federal financial institutions regulatory agencies to
take risk profiles and business models of institutions into account
when taking regulatory actions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 5, 2025
Mr. Rounds (for himself, Mr. Tillis, Mr. Hagerty, Ms. Lummis, Mr.
Cramer, and Mr. Daines) introduced the following bill; which was read
twice and referred to the Committee on Banking, Housing, and Urban
Affairs
_______________________________________________________________________
A BILL
To require the Federal financial institutions regulatory agencies to
take risk profiles and business models of institutions into account
when taking regulatory actions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Taking Account of Institutions with
Low Operation Risk Act of 2025'' or the ``TAILOR Act of 2025''.
SEC. 2. TAILORING REGULATION TO BUSINESS MODEL AND RISK.
(a) Definitions.--In this section--
(1) the term ``Federal financial institutions regulatory
agency'' means the Office of the Comptroller of the Currency,
the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the National Credit
Union Administration, and the Bureau of Consumer Financial
Protection; and
(2) the term ``regulatory action''--
(A) means any proposed, interim, or final rule or
regulation; and
(B) does not include any action taken by a Federal
financial institutions regulatory agency that is solely
applicable to an individual institution, including an
enforcement action or order.
(b) Consideration and Tailoring.--For any regulatory action
occurring after the date of enactment of this Act, each Federal
financial institutions regulatory agency shall--
(1) take into consideration the risk profile and business
models of each type of institution or class of institutions
subject to the regulatory action; and
(2) tailor the regulatory action applicable to an
institution, or type of institution, in a manner that limits
the regulatory impact, including cost, human resource
allocation, and other burdens, on the institution or type of
institution as is appropriate for the risk profile and business
model involved.
(c) Factors To Consider.--In carrying out the requirements of
subsection (b), each Federal financial institutions regulatory agency
shall consider--
(1) the aggregate impact of all applicable regulatory
action on the ability of institutions to flexibly serve their
customers and local markets on and after the date of enactment
of this Act;
(2) the potential impact that efforts to implement the
regulatory action and third-party service provider actions may
work to undercut efforts to tailor the regulatory action
described in subsection (b)(2); and
(3) the statutory provision authorizing the regulatory
action, the congressional intent with respect to the statutory
provision, and the underlying policy objectives of the
regulatory action.
(d) Notice of Proposed and Final Rulemaking.--Each Federal
financial institutions regulatory agency shall disclose and document in
every notice of proposed rulemaking and in any final rulemaking for a
regulatory action how the agency has applied subsections (b) and (c).
(e) Reports to Congress.--
(1) Individual agency reports.--Not later than 1 year after
the date of enactment of this Act and annually thereafter, each
Federal financial institutions regulatory agency shall submit
to the Committee on Banking, Housing, 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 section.
(f) Limited Look-Back Application.--
(1) In general.--Each Federal financial institutions
regulatory agency shall--
(A) conduct a review of all regulations issued in
final form pursuant to statutes enacted during the
period beginning on the date that is 7 years before the
date on which this Act is introduced in the Senate and
ending on the date of enactment of this Act; and
(B) apply the requirements of this section to the
regulations described in subparagraph (A).
(2) Revision.--Any regulation revised under paragraph (1)
shall be revised not later than 3 years after the date of
enactment of this Act.
SEC. 3. SHORT-FORM CALL REPORTS FOR ALL BANKS ELIGIBLE FOR THE
COMMUNITY BANK LEVERAGE RATIO.
The appropriate Federal banking agencies, as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813), shall promulgate
regulations establishing a reduced reporting requirement for all banks
eligible for the Community Bank Leverage Ratio, as defined in section
201(a) of the Economic Growth, Regulatory Relief, and Consumer
Protection Act (12 U.S.C. 5371 note), when making the first and third
report of condition of a year as required by section 7(a) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(a)).
SEC. 4. REPORT TO CONGRESS ON MODERNIZATION OF SUPERVISION.
Not later than 18 months after the date of enactment of this Act,
the appropriate Federal banking agencies, as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813), in consultation
with State bank supervisors, shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives a report on the modernization
of bank supervision, including the following factors:
(1) Changing bank business models.
(2) Examiner workforce and training.
(3) The structure of supervisory activities within banking
agencies.
(4) Improving bank-supervisor communication and
collaboration.
(5) The use of supervisory technology.
(6) Supervisory factors uniquely applicable to community
banks.
(7) Changes in statutes necessary to achieve more effective
supervision.
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