Banks — especially the smaller ones — can probably expect a lighter touch from regulators in the future, but not in areas that would weaken protections against another industry meltdown, according to the Atlanta Federal Reserve Bank’s new president.
Earlier this month the U.S. Treasury Department unveiled a nearly 150-page report suggesting about 100 changes to banking and financial rules that were created or made tougher by the sweeping Dodd-Frank law enacted after the Great Recession. President Donald Trump campaigned last year on promises to dismantle the Obama-era law.
But Raphael Bostic, 51, who stepped in as the 15th president of the Atlanta institution this month, doesn't foresee wholesale changes in how banking is done in Georgia.
“My expectation is that there will be a ratcheting back of a lot of the reporting burden associated with the regulatory regime, particularly for smaller banks,” said Bostic. “I think community banks have been caught up to some extent in the fallout from” the 2008 financial crisis, he said.
The first black president at any of the Federal Reserve’s regional banks, Bostic shared his views during an interview this week with The Atlanta Journal-Constitution at the Atlanta institution’s headquarters in Midtown Atlanta.
Among the changes the Treasury report suggests are getting rid of the so-called “Volcker Rule” blocking banks from doing financial trading for their own profit, and weakening the Consumer Financial Protection Bureau, which has aggressively gone after banks for alleged misdeeds that harmed customers.
But some lighter regulation may be possible because tougher oversight over the past decade made banks safer, suggested Bostic, previously a federal government official and a department head at the University of Southern California’s school of public policy.
“Now we’re kind of in a different space, at least from a political perspective, where there’s a little more confidence that financial institutions are holding more capital just as a matter of course,” he said. “And to that extend, some of the regulatory oversight is less significant.”
MYAJC.COM: REAL JOURNALISM. REAL LOCAL IMPACT.
AJC Business reporter Russell Grantham keeps you updated on the latest news about major companies, CEOs and public utilities in metro Atlanta and beyond. You'll find more on myAJC.com, including these stories:
Never miss a minute of what's happening in local business news. Subscribe to myAJC.com.
In other Business news:
About the Author
