On March 20, the House of Representatives voted to pass H.R. 4566, the Alleviating Stress Test Burdens to Help Investors Act, by a vote of 395-19. The bill, which now advances to the Senate, had bipartisan support.
The legislation seeks to exempt nonbank financial institutions that are not under supervision by the Federal Reserve, and whose primary regulator is the Securities and Exchange Commission or Commodity Futures Trading Commission from the Dodd-Frank Act’s stress testing requirements.
Introduced by Representative Bruce Poliquin (R-Maine), H.R. 4566 amends one-size fits all, bank-centric capital-based stress testing requirements for nonbanks, such as mutual funds.
“This approach is commonsense: It is not one-size fits all; it recognizes that the primary regulator of nonbank financial companies is better-suited than a bank regulator to determine whether a stress test might be useful to address risks; and it recognizes that as a general matter, stress testing asset managers is difficult and often needless.” said House Financial Services Committee Chairman Jeb Hensarling (R-Texas).
“The ‘stress-test’ regulation is a well-intentioned idea, but it must be applied in the right way for each institution and not in a ‘one-size-fits-all’ approach, so that it can work as it was originally envisioned,” Poliquin added.
Also recently passed by the House:
H.R. 4545, the Financial Institutions Examination Fairness and Reform Act of 2017 increases transparency and accountability for financial institutions by improving the timeliness of feedback from examinations and by creating a new, more independent regulatory examination appeals process.
This bill passed 283-133
H.R. 4263, the Regulation A+ Improvement Act increases the amount that companies can offer under Regulation A from $50 million to $75 million, adjusted for inflation by the Securities and Exchange Commission every two years to the nearest $10,000. This change allows private companies to consider a “mini-IPO” and raise significant capital while saving more than $2 million in costs that often come with a traditional IPO.
This bill passed 246-170