Democratic presidential nominee Hillary Clinton this week proposed specific ways she would ease the regulatory burden on small financial institutions, including greater flexibility in exam schedules.
Clinton has talked several times about the need to remove red tape for small financial institutions, but her campaign this week provided additional details about what that effort would entail.
"While Wall Street's reckless risk-taking created a global financial crisis, community banks and credit unions were working to help ordinary Americans and Main Street get ahead," the campaign said in a fact sheet.
The Clinton campaign said that while small financial institutions often are explicitly exempt from certain regulations, they still spend a great deal of money to determine if, in fact they are exempt. Clinton proposed requiring regulators to issue a fact sheet of no more than five pages explaining the impact rules would have on small institutions.
In addition, the campaign said that examiners often require small institutions to follow rules created for the larger ones as a matter of regulatory best practice, adding that as president, Clinton would ban that practice.
Clinton said she would insist that financial regulators in her administration coordinate their work with state regulators and would work to provide flexibility in exam schedules for healthy credit unions.
The NCUA currently is studying the issue of exam flexibility and Chairman Rick Metsger has vowed to loosen the requirement that each credit union be examined every year.
Clinton said she supports efforts by Senate Democrats to expand the safe harbor for qualified mortgage liability protection to include all mortgages made by credit unions and community banks as long as the loans are not sold and do not have excessive interest rates or fees.
Clinton said that she supports efforts to ensure that the Federal Reserve Board of Governors include a member with experience in issues facing financial institutions.
Credit union trade groups and members of Congress have called on financial regulators to place a higher priority on determining the impact rules have on smaller financial institutions. They have taken particular aim at the CFPB.
However, Clinton has vowed to strengthen the CFPB and fight Republican efforts to weaken it.
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