I 

113TH CONGRESS 

2D SESSION H. R. 5786 

To amend certain banking statutes to exempt community banks from certain 

regulatory requirements, to include a community bank representative 

in the membership of the Board of Governors of the Federal Reserve 

System, to create a process for a county to be designated as a rural 

area, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 3, 2014 

Mr. LANKFORD (for himself and Mr. WELCH) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To amend certain banking statutes to exempt community 

banks from certain regulatory requirements, to include 

a community bank representative in the membership of 

the Board of Governors of the Federal Reserve System, 

to create a process for a county to be designated as 

a rural area, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Financial Insti5 tutions Regulatory Relief Act of 2014’’. 


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1 SEC. 2. CERTAIN LOANS INCLUDED AS QUALIFIED MORT2 GAGES. 

3 Section 129C(b)(2) of the Truth in Lending Act (15 

4 U.S.C. 1639c(b)(2)) is amended by adding at the end the 

5 following: 

6 ‘‘(F) LOANS HELD ON PORTFOLIO.—The 

7 term ‘qualified mortgage’ includes a residential 

8 mortgage loan made by a creditor having less 

9 than $10,000,000,000 in total assets, so long as 

10 such loan is originated and retained in portfolio 

11 of the creditor for the duration of the loan 

12 term.’’. 

13 SEC. 3. EXEMPTION FROM ESCROW REQUIREMENTS FOR 

14 LOANS HELD BY SMALL CREDITORS. 

15 Section 129D(c) of the Truth in Lending Act (15 

16 U.S.C. 1639d(c)) is amended— 

17 (1) by redesignating paragraphs (1), (2), (3), 

18 and (4) as subparagraphs (A), (B), (C), and (D) 

19 and moving such subparagraphs 2 ems to the right; 

20 (2) striking ‘‘The Board’’ and inserting the fol21 lowing: 

22 ‘‘(1) IN GENERAL.—The Bureau’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(2) TREATMENT OF LOANS HELD BY SMALLER

25 CREDITORS.—The Bureau shall, by regulation, exempt 

26 from the requirements of subsection (a) any loan secured 


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1 by a first lien on a consumer’s principle dwelling, if such 

2 loan is held by a creditor with assets of less than 

3 $10,000,000,000.’’. 

4 SEC. 4. INCREASE IN SMALL SERVICER EXEMPTION. 

5 Section 6 of the Real Estate Settlement Procedures 

6 Act of 1974 (12 U.S.C. 2605) is amended by adding at 

7 the end the following: 

8 ‘‘(n) SMALL SERVICER EXEMPTION.—The Bureau 

9 shall, by regulation, provide exemptions to, or adjustments 

10 for, the provisions of this section for servicers that service 

11 10,000 or fewer mortgage loans, in order to reduce regu12 latory burdens while appropriately balancing consumer 

13 protections.’’. 

14 SEC. 5. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIRE15 MENT UNDER THE GRAMM-LEACH-BLILEY 

16 ACT. 

17 Section 503 of the Gramm-Leach-Bliley Act (15 

18 U.S.C. 6803) is amended by adding at the end the fol19 lowing: 

20 ‘‘(f) EXCEPTION TO ANNUAL NOTICE REQUIRE21 MENT.—A financial institution that— 

22 ‘‘(1) provides nonpublic personal information 

23 only in accordance with the provisions of subsection 

24 (b)(2) or (e) of section 502 or regulations prescribed 

25 under section 504(b), and 


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1 ‘‘(2) has not changed its policies and practices 

2 with regard to disclosing nonpublic personal infor3 mation from the policies and practices that were dis4 closed in the most recent disclosure sent to con5 sumers in accordance with this subsection, 

6 shall not be required to provide an annual disclosure under 

7 this subsection until such time as the financial institution 

8 fails to comply with any criteria described in paragraph 

9 (1) or (2).’’. 

10 SEC. 6. CHANGES REQUIRED TO SMALL BANK HOLDING 

11 COMPANY POLICY STATEMENT ON ASSESS12 MENT OF FINANCIAL AND MANAGERIAL FAC13 TORS. 

14 (a) SMALL BANK HOLDING COMPANY POLICY

15 STATEMENT ON ASSESSMENT OF FINANCIAL AND MANA16 GERIAL FACTORS.— 

17 (1) IN GENERAL.—Before the end of the 6- 

18 month period beginning on the date of the enact19 ment of this Act, the Board of Governors of the 

20 Federal Reserve System shall publish in the Federal 

21 Register proposed revisions to the Small Bank Hold22 ing Company Policy Statement on Assessment of Fi23 nancial and Managerial Factors (12 C.F.R. part 

24 225—appendix C) that provide that the policy shall 

25 apply to a bank holding company which has pro 


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1 forma consolidated assets of less than 

2 $5,000,000,000 and that— 

3 (A) is not engaged in any nonbanking ac4 tivities involving significant leverage; and 

5 (B) does not have a significant amount of 

6 outstanding debt that is held by the general 

7 public. 

8 (2) ADJUSTMENT OF AMOUNT.—The Board of 

9 Governors of the Federal Reserve System shall an10 nually adjust the dollar amount referred to in para11 graph (1) in the Small Bank Holding Company Pol12 icy Statement on Assessment of Financial and Man13 agerial Factors by an amount equal to the percent14 age increase, for the most recent year, in total assets 

15 held by all insured depository institutions, as deter16 mined by the Board. 

17 (b) INCREASE IN DEBT-TO-EQUITY RATIO OF SMALL

18 BANK HOLDING COMPANY.—Before the end of the 6- 

19 month period beginning on the date of the enactment of 

20 this Act, the Board of Governors of the Federal Reserve 

21 System shall publish in the Federal Register proposed re22 visions to the Small Bank Holding Company Policy State23 ment on Assessment of Financial and Managerial Factors 

24 (12 C.F.R. part 225—appendix C) such that the debt-to25 equity ratio allowable for a small bank holding company 


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1 in order to remain eligible to pay a corporate dividend and 

2 to remain eligible for expedited processing procedures 

3 under Regulation Y of the Board of Governors of the Fed4 eral Reserve System would increase from 1:1 to 3:1. 

5 SEC. 7. MEMBERSHIP OF BOARD OF GOVERNORS OF THE 

6 FEDERAL RESERVE SYSTEM. 

7 (a) INCLUSION OF A PERSON WITH COMMUNITY

8 BANK EXPERIENCE.—The first undesignated paragraph 

9 of section 10 of the Federal Reserve Act (12 U.S.C. 241) 

10 is amended by inserting after the second sentence the fol11 lowing: ‘‘The Board shall at all times have as a member 

12 at least 1 person with demonstrated experience working 

13 in or supervising community banks having less than 

14 $10,000,000,000 in total assets’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 subsection (a) shall take effect on the date of enactment 

17 of this Act and apply to appointments made on and after 

18 that effective date, excluding any nomination pending in 

19 the Senate on that date. 

20 SEC. 8. DESIGNATION OF RURAL AREA. 

21 (a) APPLICATION.—Not later than 90 days after the 

22 date of the enactment of this Act, the Bureau of Consumer 

23 Financial Protection shall establish an application process 

24 under which a person who lives or does business in a State 

25 may, with respect to an area identified by the person in 


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1 such State that has not been designated by the Bureau 

2 as a rural area for purposes of a Federal consumer finan3 cial law (as defined under section 1002 of the Consumer 

4 Financial Protection Act of 2010), apply for such area to 

5 be so designated. 

6 (b) EVALUATION CRITERIA.—When evaluating an 

7 application submitted under subsection (a), the Bureau 

8 shall take into consideration the following factors: 

9 (1) Criteria used by the Director of the Bureau 

10 of the Census for classifying geographical areas as 

11 rural or urban. 

12 (2) Criteria used by the Director of the Office 

13 of Management and Budget to designate counties as 

14 metropolitan or micropolitan or neither. 

15 (3) Criteria used by the Secretary of Agri16 culture to determine property eligibility for rural de17 velopment programs. 

18 (4) The Department of Agriculture rural-urban 

19 commuting area codes. 

20 (5) A written opinion provided by the State’s 

21 bank supervisor, as defined under section 3(r) of the 

22 Federal Deposit Insurance Act (12 U.S.C. 1813(r)). 

23 (6) Population density. 

24 (c) PUBLIC COMMENT PERIOD.— 


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1 (1) IN GENERAL.—Not later than 60 days after 

2 receiving an application submitted under subsection 

3 (a), the Bureau shall— 

4 (A) publish such application in the Federal 

5 Register; and 

6 (B) make such application available for 

7 public comment for not fewer than 90 days. 

8 (2) LIMITATION ON ADDITIONAL APPLICA9 TIONS.—Nothing in this section shall be construed 

10 to require the Bureau, during the public comment 

11 period with respect to an application submitted 

12 under subsection (a), to accept an additional appli13 cation with respect to the area that is the subject of 

14 the initial application. 

15 (d) DECISION ON DESIGNATION.—Not later than 90 

16 days after the end of the public comment period under 

17 subsection (c)(1) for an application, the Bureau shall— 

18 (1) grant or deny such application, in whole or 

19 in part; and 

20 (2) publish such grant or denial in the Federal 

21 Register, along with an explanation of what factors 

22 the Bureau relied on in making such determination. 

23 (e) SUBSEQUENT APPLICATIONS.—A decision by the 

24 Bureau under subsection (d) to deny an application for 

25 an area to be designated as a rural area shall not preclude 


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1 the Bureau from accepting a subsequent application sub2 mitted under subsection (a) for such area to be so des3 ignated, so long as such subsequent application is made 

4 after the end of the 90-day period beginning on the date 

5 that the Bureau denies the application under subsection 

6 (d). 

Æ 


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