BPI Comments on Joint Agency EGRPRA Regulatory Review

To Whom It May Concern:

The Bank Policy Institute^[1] is writing in response to the fourth of four joint notices of regulatory review pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996 ("EGRPRA") issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the "Agencies").^[2] Consistent with the purposes of the EGRPRA review and our prior letters addressing the previous notices,^[3] this letter continues to advocate for changes to "outdated or unnecessary regulatory requirements" within the categories of the regulations under evaluation.

As demonstrated in our previous letters, we believe the EGRPRA review is an opportunity to consider broader regulatory and supervisory trends that impose unnecessary burdens and detract from both regulators' and banks' ability to focus on material risks to the safety and soundness of the U.S. banking system. As noted in our previous letters, compliance burdens have surged since 2016, with C-suite time devoted to compliance matters up 75 percent, board time devoted to compliance up 63 percent, and compliance staffing increasing by 62 percent.^[4] We urge the Agencies to ensure the supervisory and regulatory regime is focused on material issues affecting the safety and soundness of individual institutions and the financial system more broadly.

As we have with each notice, we reiterate again the importance of including other agencies that issue regulations governing banking organizations, such as the Consumer Financial Protection Bureau and Financial Crimes Enforcement Network. A complete and accurate review of the overall regulatory burden is made more challenging without their participation. To better fulfill EGRPRA's primary purpose of providing a comprehensive review of the actual operation of the regulatory and compliance framework, Congress should update the statute to explicitly include agencies beyond the banking regulators with mandates to, or histories of, creating new requirements for or affecting banking organizations. Until EGRPRA is updated, these agencies should voluntarily join the EGRPRA review, as the National Credit Union Administration has done.

In this letter we focus on the Banking Operations category of regulations under review. Given the ongoing rulemakings and proposals within the Capital and the Community Reinvestment Act categories we have chosen not to provide new recommendations on these topics in this letter. The appendix refers the Agencies to existing commentary from BPI in these areas and specifically to commentary on outstanding rulemakings and proposals. Finally, BPI reiterates its previous suggestions of ways to reduce the ongoing burden of regulatory reporting requirements.

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

[2] See FRB, FDIC, OCC, Regulatory Publication and Review Under the Economic Growth and Regulatory Paperwork Reduction Act of 1996, 90 Fed. Reg. 35241 (July 25, 2025).

[3] See Joshua Smith, Comment on First EGRPRA Notice, BANK POLICY INSTITUTE (May 6, 2024), https://bpi.com/bpi- highlights-growing-compliance-demand-on-bank-resources-in-egrpra-response/; Joshua Smith, Comment on Second EGRPRA Notice, BANK POLICY INSTITUTE (Oct. 29, 2024), https://bpi.com/bpi-responds-to-joint-regulatory-review-on-egrpra/.

[4] See generally, Joshua Smith and Benjamin Gross, Survey Finds Compliance is Growing Demand on Bank Resources, BANK POLICY INSTITUTE (Oct. 29, 2024), https://bpi.com/survey-finds-compliance-is-growing-demand-on-bank-resources. The survey defined "regulatory or supervisory compliance" as "compliance with law, regulation, guidance or other governmental mandate, including responding to mandates and recommendations from federal and state banking agencies, CFPB, SEC and other U.S. market and prudential regulatory agencies." By contrast, the survey defined "risk management" as "risk management in the ordinary course unrelated to prudential regulatory or supervisory requirements." By example, the survey noted that "credit underwriting is an ordinary risk management practice for any business lending money, regardless of any prudential regulatory or supervisory requirements."