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Today, the House passed H.R. 6392, the Systemic Risk Designation Improvement Act of 2016.  A previous version of the bipartisan bill passed the House Financial Services Committee in November of last year by a vote of 39-16. Under current law, a financial instruction is automatically designated as a systemically important financial institution (SIFI) if it has $50 billion in assets. Because of this arbitrary threshold, regional and large community banks are subject to the same level of regulation as complex, trillion-dollar banks, creating an unnecessary burden that affects consumer access to credit and services.

This bill would remove the arbitrary SIFI threshold and replace it with an evaluative  process that takes into account factors other than size, including complexity and interconnectedness, to determine whether an institution poses a threat to U.S. economic stability.

Watch Congressman Hill’s Floor Speech on H.R. 6392

Hill said: “This bill today is not about dangerous agendas, greed or signing bonuses, or wholesale exemptions of regulation for 27 big banks – not at all. This bill is about using common sense and taking off the autopilot that’s in Dodd-Frank, which designates our SIFIs on size alone, and in fact, includes all the factors that should be considered for institutions that might present a systemic risk.

“This is a bipartisan bill that has support on both sides of the aisle. Former Chairman [Barney Frank’s] comments have been read into the record, but how about [Federal Reserve Board Member] Dan Tarullo, who said: ‘Resolution planning and ­­­quite elaborate requirements of our supervisory stress do not seem to me to be necessary for banks between $50 billion and $100 billion.’ Tom Curry, our Comptroller of the Currency said: ‘The better approach is to use an asset figure as a first screen and then give discretion to supervisors based on risks in the business plan and operations.’ And Senator Sherrod Brown, certainly a supporter of Dodd-Frank said: ‘I do not agree that some banks over $50 billion should be regulated like Wall Street mega-banks.’ I support this bill, and I yield back.”

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