PRESS RELEASE
Federal Deposit Insurance Corporation
May 12, 2004 Media Contact:
David Barr (202) 898-6992
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-51-2004
FDIC Vice Chairman Warns That Growing Regulatory Burden Could
Threaten Community-Based Banks
FOR IMMEDIATE RELEASE
A growing tide of regulatory burden could threaten the future of smaller community
banks, Federal Deposit Insurance Corporation (FDIC) Vice Chairman John M. Reich
said in testimony before the House Subcommittee on Financial Institutions and
Consumer Credit. "The volume and complexity of existing banking regulations, coupled
with new laws and regulations, may ultimately threaten the survival of our community
banks," Reich said.
Noting that since the enactment of the Financial Institutions Reform, Recovery and
Enforcement Act (FIRREA) in 1989, banking and thrift regulatory agencies have
promulgated 801 final rules, Reich said, "There were good and sufficient reasons for
many of these rules . . . however, 801 regulatory changes over a 15-year period is
certainly a lot for banks to digest, particularly smaller community banks with limited
staff."
Regulatory burden often affects smaller banks disproportionately, Reich said. "New
regulations have a greater impact on some community banks, especially small
community banks (under $100 million in assets), than on larger institutions due to their
inability to spread start-up and implementation costs over a large number of
transactions," he said.
Reich is leading an interagency initiative, required by the Economic Growth and
Regulatory Paperwork Reduction Act of 1996 (EGRPRA), to review all federal bank and
thrift regulations in an effort to eliminate any regulatory requirements that are outdated,
unnecessary or unduly burdensome. The agencies are putting one or more categories
of regulations out for public comment every six months, with 90-day comment periods.
Federal Deposit Insurance Corporation
May 12, 2004 Media Contact:
David Barr (202) 898-6992
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-51-2004
FDIC Vice Chairman Warns That Growing Regulatory Burden Could
Threaten Community-Based Banks
FOR IMMEDIATE RELEASE
A growing tide of regulatory burden could threaten the future of smaller community
banks, Federal Deposit Insurance Corporation (FDIC) Vice Chairman John M. Reich
said in testimony before the House Subcommittee on Financial Institutions and
Consumer Credit. "The volume and complexity of existing banking regulations, coupled
with new laws and regulations, may ultimately threaten the survival of our community
banks," Reich said.
Noting that since the enactment of the Financial Institutions Reform, Recovery and
Enforcement Act (FIRREA) in 1989, banking and thrift regulatory agencies have
promulgated 801 final rules, Reich said, "There were good and sufficient reasons for
many of these rules . . . however, 801 regulatory changes over a 15-year period is
certainly a lot for banks to digest, particularly smaller community banks with limited
staff."
Regulatory burden often affects smaller banks disproportionately, Reich said. "New
regulations have a greater impact on some community banks, especially small
community banks (under $100 million in assets), than on larger institutions due to their
inability to spread start-up and implementation costs over a large number of
transactions," he said.
Reich is leading an interagency initiative, required by the Economic Growth and
Regulatory Paperwork Reduction Act of 1996 (EGRPRA), to review all federal bank and
thrift regulations in an effort to eliminate any regulatory requirements that are outdated,
unnecessary or unduly burdensome. The agencies are putting one or more categories
of regulations out for public comment every six months, with 90-day comment periods.
The comments will help form the basis for recommendations to reduce or eliminate
regulations.
Recommendations by bankers, consumers and the public form a critical part of the
process. "Banker, consumer and public insight into these issues is critical to the
success of our effort," Reich said. "The regulatory agencies have tried to make it as
easy as possible for all interested parties to get information about the EGRPRA project
and to let us know what they think are the most critical regulatory burden issues."
Attachment: Statement of John M. Reich Vice Chairman Federal Deposit Insurance
Corporation on the Impact of Regulatory Burden on America's Community-Based Banks
Before the Subcommittee on Financial Institutions and Consumer Credit of the
Committee on Financial Services U.S. House of Representatives, May 12, 2004
regulations.
Recommendations by bankers, consumers and the public form a critical part of the
process. "Banker, consumer and public insight into these issues is critical to the
success of our effort," Reich said. "The regulatory agencies have tried to make it as
easy as possible for all interested parties to get information about the EGRPRA project
and to let us know what they think are the most critical regulatory burden issues."
Attachment: Statement of John M. Reich Vice Chairman Federal Deposit Insurance
Corporation on the Impact of Regulatory Burden on America's Community-Based Banks
Before the Subcommittee on Financial Institutions and Consumer Credit of the
Committee on Financial Services U.S. House of Representatives, May 12, 2004