Senators Jon Tester, D-Mont., and Jerry Moran, R-Kan., introduced a bill today (S. 1139) that would raise the threshold for a banking organization to be subject to Dodd-Frank Act Stress Tests (DFAST) to $50 billion in total consolidated assets from the current $10 billion threshold.  The bill, titled the Main Street Regulatory Fairness Act, would provide relief for 72 banking organizations that currently have consolidated assets of $10 billion or greater, but less than $50 billion.  The bill would also provide federal banking agencies with flexibility to require the DFAST exercise to be conducted less frequently than annually for banking organizations that would remain subject to DFAST.

Earlier this month, Senators Tester and Moran also reintroduced the CLEAR Relief Act, S. 1002, which would provide relief to community banks that includes:

  • amendments to the “qualified mortgage” definition to include any mortgage originated and retained for at least three years by a bank with less than $10 billion in total consolidated assets;
  • an exemption from the Volcker Rule for banking organizations with $10 billion or less in total assets;
  • an exemption from the requirement of the Sarbanes-Oxley Act to conduct annual management assessments of internal controls for banking organizations with $1 billion or less in total consolidated assets; and
  • an exemption from escrow requirements under the Truth in Lending Act for banks with $10 billion or less in total consolidated assets.

These two bills signal that bipartisan regulatory reform legislation is likely to focus on relief for community and midsize banking organizations rather than larger institutions.