Bill Overview
Title: TAILOR Act of 2022
Description: This bill addresses the supervision of financial institutions. The bill requires federal financial regulatory agencies to (1) tailor any regulatory actions so as to limit burdens on the institutions involved, with consideration of the risk profiles and business models of those institutions; and (2) report to Congress on specific actions taken to do so, as well as on other related issues. The bill's tailoring requirement applies not only to future regulatory actions but also to regulations adopted within the last seven years. The bill also reduces certain reporting requirements for banks eligible for the community bank leverage ratio. Finally, federal banking agencies must report on the modernization of bank supervision, including examiner workforce and training and statutory changes necessary to achieve more effective supervision.
Sponsors: Sen. Rounds, Mike [R-SD]
Target Audience
Population: People associated with financial institutions affected by regulation changes
Estimated Size: 500000
- The TAILOR Act of 2022 focuses on regulatory actions for financial institutions, emphasizing tailoring regulation to reduce the burden based on risk profiles and business models.
- This could impact all financial institutions operating in or through the US, including banks, credit unions, and possibly non-bank financial institutions.
- Consumers and businesses affected by changes in the financial institutions' operations due to these regulatory tailoring efforts may also see secondary impacts.
- Shareholders and employees of the financial institutions might experience changes due to shifts in how these institutions are regulated and operate.
Reasoning
- The policy is particularly impactful for individuals directly associated with the operations and regulation of financial institutions, such as employees and shareholders.
- Those in executive and administrative roles within financial institutions may experience changes in workload and regulatory pressure, affecting their wellbeing.
- Community bank customers might indirectly benefit from cost reductions passed as lower fees or improved services.
- Residents working in rural areas heavily relying on community banks may see the greatest impacts due to the reduction in regulatory burdens, leading potentially to improved financial services.
- There exists a subset of financial institution employees whose operations might be complex and require more detailed tailoring, making this policy less impactful on their work-life balance and wellbeing.
- Customers who are invested in or have strong relationships with local banks may see indirect effects.
- High-level executives are less common in the general population, but they see significant direct impacts from policy changes.
- Investors and shareholders across the country might see their financial stability altered, impacting their perceived wellbeing.
Simulated Interviews
Bank Supervisor (New York, NY)
Age: 34 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I think this policy could help reduce some inefficiencies, but we still need to be careful about too little oversight.
- Our bank might benefit greatly from reduced reporting duties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 5 |
Credit Union Manager (Chicago, IL)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- This could really help our credit union focus more on community outreach and personalized services.
- It's a positive move if execution is well-managed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 8 | 4 |
Fintech Developer (San Francisco, CA)
Age: 29 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- We already work with low burdens, but maybe this policy will encourage more innovation.
- It might open up more collaboration possibilities between banks and fintech.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Loan Officer (Miami, FL)
Age: 52 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- Reducing the red-tape can definitely help us serve more clients effectively.
- I feel these changes are long overdue.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Community Bank Shareholder (Seattle, WA)
Age: 30 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 15/20
Statement of Opinion:
- Hopefully, this policy can increase our bank's profitability by cutting unnecessary costs.
- As a shareholder, there's optimism for better returns.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 8 | 3 |
Financial Analyst (Kansas City, MO)
Age: 41 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 7.0 years
Commonness: 9/20
Statement of Opinion:
- The policy might simplify analyses around community banks which is good for our assessments.
- If it leads to more investments in these banks, it will be beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Community Bank CEO (Lincoln, NE)
Age: 39 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- The anticipated reduction in compliance burden could allow us to redirect resources to beneficial community projects.
- This is positive if the relief is significant and long-lasting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 8 | 4 |
| Year 3 | 8 | 4 |
| Year 5 | 8 | 4 |
| Year 10 | 9 | 3 |
| Year 20 | 8 | 3 |
Bank Examiner (Austin, TX)
Age: 60 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- This policy might reduce my workload but I am concerned it might lead to oversight lapses.
- More efficiency in processes is needed; still, this change should be watched carefully against risks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 3 |
Community Bank Customer (Boise, ID)
Age: 26 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- Potentially better services or lower fees would be great if this policy helps our local bank.
- It seems abstract to me, but I hope there's a positive trickle-down.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Credit Risk Manager (Boston, MA)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 8.0 years
Commonness: 7/20
Statement of Opinion:
- This could streamline some of our operations although a fair bit depends on how stringent the actual implementation is.
- There might be less minutiae in compliance reports.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 6 | 4 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $12000000 (Low: $8000000, High: $16000000)
Year 3: $10000000 (Low: $5000000, High: $15000000)
Year 5: $10000000 (Low: $5000000, High: $15000000)
Year 10: $10000000 (Low: $5000000, High: $15000000)
Year 100: $10000000 (Low: $5000000, High: $15000000)
Key Considerations
- The cost and savings estimates account for both initial and ongoing efforts to tailor and implement regulatory changes.
- The modernization of supervision techniques might induce one-off costs that could level out over time.
- The fiscal impact is influenced by the effectiveness of regulatory tailoring and savings achieved through reduced compliance burdens.