House Rep. Randy Hultgren (R-Ill.), along with co-sponsors Reps. Terri Sewell (D-Ala.) and Blaine Luetkemeyer (R-Mo.), introduced the Community Bank Reporting Relief Act (H.R. 4500), a bill that would streamline bank reporting by permitting well-capitalized and highly rated banks to file a short-form Call Report in the first and third quarters each year. The full Call Report then would be required in other quarters.
“Credit provided by community banks is the lifeblood of communities across my district. Excessive reporting requirements that were intended to address missteps of big banks have trickled down to healthy community banks that played no part in the financial crisis,” Hultgren said in a news release. “Neighborhood banks spend hundreds of hours each year on completion of the Call Report.”
Specifically, the bill would amend Section 7(a) of the Federal Deposit Insurance Act, by adding the following language: “Short-form reporting - The appropriate federal banking agencies shall issue regulations allowing for a reduced reporting requirement for covered depository institutions when making the first and third report of condition for a year as required pursuant to Paragraph (3).”
Covered depository institutions would include those that are “highly rated and well capitalized (as defined under Section 38(b)); and satisfies such other criteria as the appropriate federal banking agencies determine appropriate.”
Independent Community Bankers of America (ICBA) President and CEO Camden R. Fine issued a statement in support of the bill.
“ICBA, its affiliated state associations and the nation’s community banks have repeatedly called on regulators to streamline the quarterly call report to help community banks devote more of their resources to their customers and communities,” Fine said. “The quarterly call report, which now comprises some 80 pages supported by almost 700 pages of instructions, represents a growing burden on community banks without a corresponding supervisory benefit. The streamlined report advanced by the Community Bank Reporting Relief Act would provide sufficient information for regulators while being significantly less burdensome to prepare.”
ICBA had found in a 2014 survey that 98 percent of respondents stated that a short-form call report would reduce regulatory burden and that 72 percent had said that the reduction would be “substantial.”
The survey also found that the annual cost of preparing the call report had increased for 86 percent of respondents over the past 10 years and that community banks were spending hundreds of hours and tens of thousands of dollars each year to comply with Call Report requirements.
The bill has been referred to the House Financial Services Committee.