Before I get to that, let me briefly mention some things the Federal Reserve and other agencies have done—in some cases presaging steps taken in the new legislation—to reduce the regulatory burden on community and regional banks. One supervisory improvement is a Federal Reserve program called Bank Exams Tailored to Risk, or the BETR program.
It uses financial metrics to differentiate the level of risk between banks before examinations and assist examiners in tailoring examination procedures to minimize the regulatory burden for firms that engage in low-risk activities, while subjecting higher-risk activities to more testing and review. Another initiative has been to shift a significant amount of the Federal Reserve’s examination activity offsite.