TAILOR Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 741 To require the Federal financial institutions regulatory agencies to take risk profiles and business models of institutions into account when taking regulatory actions, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 24, 2019 Mr. TIPTON (for himself, Mr. BUDD, Mr. MARSHALL, Mr. WOMACK, Mr. LUCAS, Mr. RODNEY DAVIS of Illinois, Mr. BARR, Mr. KING of New York, Mr. LOUDERMILK, Mr. MULLIN, Mr. FORTENBERRY, Mr. LATTA, Mr. COLLINS of New York, Mr. BUCK, Mr. JOHNSON of Ohio, Mr. COLE, Mr. STIVERS, Mr. ZELDIN, Mr. DAVIDSON of Ohio, Mr. POSEY, Mr. HILL of Arkansas, Mr. RIGGLEMAN, and Mr. KUSTOFF of Tennessee) intro- duced the following bill; which was referred to the Committee on Finan- cial Services A BILL To require the Federal financial institutions regulatory agen- cies to take risk profiles and business models of institu- tions into account when taking regulatory actions, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:40 Feb 01, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H741.IH H741 kjohnson on DSK79L0C42 with BILLS 2 •HR 741 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Taking Account of In- 2 stitutions with Low Operation Risk Act of 2019’’ or the 3 ‘‘TAILOR Act of 2019’’. 4 SEC. 2. REGULATIONS APPROPRIATE TO BUSINESS MOD- 5 ELS. 6 (a) IN GENERAL.—For any regulatory action occur- 7 ring after the date of the enactment of this Act, each Fed- 8 eral financial institutions regulatory agency shall— 9 (1) take into consideration the risk profile and 10 business models of each type of institution or class 11 of institutions subject to the regulatory action; 12 (2) determine the necessity, appropriateness, 13 and impact of applying such regulatory action to 14 such institutions or classes of institutions; and 15 (3) tailor such regulatory action in a manner 16 that limits the regulatory compliance impact, cost, li- 17 ability risk, and other burdens, as appropriate, for 18 the risk profile and business model of the institution 19 or class of institutions involved. 20 (b) OTHER CONSIDERATIONS.—In carrying out the 21 requirements of subsection (a), each Federal financial in- 22 stitutions regulatory agency shall consider— 23 (1) the impact that such regulatory action, both 24 by itself and in conjunction with the aggregate effect 25 of other regulations, has on the ability of the appli- 26 VerDate Sep 11 2014 22:40 Feb 01, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H741.IH H741 kjohnson on DSK79L0C42 with BILLS 3 •HR 741 IH cable institution or class of institutions to serve 1 evolving and diverse customer needs; 2 (2) the potential impact of examination manu- 3 als, regulatory actions taken with respect to third- 4 party service providers, or other regulatory directives 5 that may be in conflict or inconsistent with the tai- 6 loring of such regulatory action described in sub- 7 section (a)(3); and 8 (3) the underlying policy objectives of the regu- 9 latory action and statutory scheme involved. 10 (c) NOTICE OF PROPOSED AND FINAL RULE- 11 MAKING.—Each Federal financial institutions regulatory 12 agency shall disclose in every notice of proposed rule- 13 making and in any final rulemaking for a regulatory ac- 14 tion how the agency has applied subsections (a) and (b). 15 (d) REPORTS TO CONGRESS.— 16 (1) INDIVIDUAL AGENCY REPORTS.— 17 (A) IN GENERAL.—Not later than 1 year 18 after the date of the enactment of this Act and 19 annually thereafter, each Federal financial in- 20 stitutions regulatory agency shall report to the 21 Committee on Financial Services of the House 22 of Representatives and the Committee on Bank- 23 ing, Housing, and Urban Affairs of the Senate 24 on the specific actions taken to tailor the regu- 25 VerDate Sep 11 2014 22:40 Feb 01, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H741.IH H741 kjohnson on DSK79L0C42 with BILLS 4 •HR 741 IH latory actions of the agency pursuant to the re- 1 quirements of this Act. 2 (B) APPEARANCE BEFORE THE COMMIT- 3 TEES.—The head of each Federal financial in- 4 stitution regulatory agency shall appear before 5 the Committee on Financial Services of the 6 House of Representatives and the Committee 7 on Banking, Housing, and Urban Affairs of the 8 Senate after each report is made pursuant to 9 subparagraph (A) to testify on the contents of 10 such report. 11 (2) FIEC REPORTS.— 12 (A) IN GENERAL.—Not later than 3 13 months after each report is submitted under 14 paragraph (1), the Financial Institutions Ex- 15 amination Council shall report to the Com- 16 mittee on Financial Services of the House of 17 Representatives and the Committee on Bank- 18 ing, Housing, and Urban Affairs of the Senate 19 on— 20 (i) the extent to which regulatory ac- 21 tions tailored pursuant to this Act result in 22 different treatment of similarly situated in- 23 stitutions of diverse charter types; and 24 VerDate Sep 11 2014 22:40 Feb 01, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H741.IH H741 kjohnson on DSK79L0C42 with BILLS 5 •HR 741 IH (ii) the reasons for such differential 1 treatment. 2 (B) APPEARANCE BEFORE THE COMMIT- 3 TEES.—The Chairman of the Financial Institu- 4 tions Examination Council shall appear before 5 the Committee on Financial Services of the 6 House of Representatives and the Committee 7 on Banking, Housing, and Urban Affairs of the 8 Senate after each report is made pursuant to 9 subparagraph (A) to testify on the contents of 10 such report. 11 (e) LIMITED LOOK-BACK APPLICATION.— 12 (1) IN GENERAL.—Each Federal financial insti- 13 tutions regulatory agency shall conduct a review of 14 all regulations adopted during the period beginning 15 on the date that is seven years before the date of the 16 introduction of this Act in the House of Representa- 17 tives and ending on the date of the enactment of 18 this Act, and apply the requirements of this Act to 19 such regulations. 20 (2) REVISION.—If the application of the re- 21 quirements of this Act to any such regulation re- 22 quires such regulation to be revised, the applicable 23 Federal financial institutions regulatory agency shall 24 VerDate Sep 11 2014 22:40 Feb 01, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H741.IH H741 kjohnson on DSK79L0C42 with BILLS 6 •HR 741 IH revise such regulation within 3 years of the enact- 1 ment of this Act. 2 (f) DEFINITIONS.—In this Act, the following defini- 3 tions shall apply: 4 (1) FEDERAL FINANCIAL INSTITUTIONS REGU- 5 LATORY AGENCIES.—The term ‘‘Federal financial in- 6 stitutions regulatory agencies’’ means the Office of 7 the Comptroller of the Currency, the Board of Gov- 8 ernors of the Federal Reserve System, the Federal 9 Deposit Insurance Corporation, the National Credit 10 Union Administration, and the Bureau of Consumer 11 Financial Protection. 12 (2) REGULATORY ACTION.—The term ‘‘regu- 13 latory action’’ means any proposed, interim, or final 14 rule or regulation, guidance, or published interpreta- 15 tion. 16 Æ VerDate Sep 11 2014 22:40 Feb 01, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H741.IH H741 kjohnson on DSK79L0C42 with BILLS