S.Amdt. 3104

This amendment, submitted by Mr. Scott of South Carolina, aims to add a section titled Financial Integrity and Regulation Management to bill S. 2296. Its primary purpose is to stop Federal banking agencies from using reputational risk to supervise or regulate depository institutions.

Key Changes and Additions:

• Elimination of Reputational Risk: It requires Federal banking agencies to remove all references to reputational risk (or similar terms) from their rules, manuals, and guidance. It prohibits agencies from using this risk to make supervisory ratings, issue criticisms, or take enforcement actions.

• Regulatory Tailoring: It requires agencies to tailor new regulatory actions based on the specific risk profile and business model of the institutions involved to limit burdens like cost and human resource allocation.

• Accountability and Reporting:

  • Agencies must document how they tailored regulations in their rulemaking notices.
  • Agencies must review regulations issued in the seven years prior to the amendment's introduction in the Senate.
  • Agencies must submit annual reports to Congress on their tailoring efforts.
  • A report on the modernization of bank supervision must be submitted within 18 months.
  • A final report confirming the implementation of this section is required within 180 days.

• Reduced Reporting: The amendment calls for the creation of reduced reporting requirements (short-form call reports) for banks eligible for the Community Bank Leverage Ratio.