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Committee advances Taylor Act to require regulators to tailor rules to institution risk profiles
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Summary
HR 3380, the Taylor Act, would require federal regulators to tailor regulations and supervisory actions to an institution’s size, risk profile, and business model. Proponents said the change protects community banks from one-size-fits-all rules; critics warned it could enable legal challenges and weaken consumer protections.
Taylor Act would require regulators to consider institution-specific risk and business model before issuing rules.
Representative Barry Loudermilk, sponsor of HR 33 80, told the committee the Taylor Act would “right size federal regulation” by requiring regulators to tailor rules to the risk profile of small and midsize institutions rather than applying a one-size-fits-all approach.
Proponents, including Subcommittee Chair Andy Barr, argued tailoring would reduce regulatory costs that force community banks to limit services or shrink, and that the bill would require agencies to explain tailoring decisions and report to Congress.
Ranking Member Maxine Waters said she “strongly oppose[d] HR 33 80,” calling it a “dangerous, sweeping, deregulatory measure” that could undermine the CFPB and allow wealthy megabanks to challenge regulations and block rulemaking. Waters cautioned that the bill could make it difficult for agencies to act in the public interest if a rule’s benefits were not weighed against costs.
Committee members who supported the bill said it preserves regulators’ authorities for safety and soundness while focusing compliance on material risks. The committee adopted the amendment in the nature of a substitute and ordered HR 33 80 favorably reported to the House; the committee recorded the final tally as 29 ayes and 23 nays on ordering the bill to be reported.
