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For release on delivery
Noon EST (9:00 a.m. PST)
December 2, 2014

Opening Remarks

Lael Brainard
Board of Governors of the Federal Reserve System
at the
Economic Growth and Regulatory Paperwork Reduction Act Outreach Meeting
Los Angeles, California

December 2, 2014

On behalf of the Federal Reserve System, I am pleased to be here at the first in a
series of outreach meetings designed to hear your feedback and concerns about regulatory
burden. I want to thank you all for taking the time to participate in this important
dialogue and also extend my thanks to the Federal Reserve Bank of San Francisco for
providing space for today’s meeting at the Los Angeles Branch.
The Federal Reserve takes its mandate under the Economic Growth and
Regulatory Paperwork Reduction Act (EGRPRA) seriously. The EGRPRA review
provides an opportunity for the agencies to consider whether current regulations are wellbalanced and effective or whether any are outdated, unnecessary, or unduly burdensome.
Public input is critical to this process and will help us identify potential solutions to
alleviate undue burden.
Well-conceived regulations help to ensure the safety and soundness of our
banking system, as well as the fair treatment of consumers. But unnecessary regulations
drain bank resources and reduce the important services that depository institutions
provide to households and businesses.
Creating balanced regulations that are effective and thoughtfully calibrated to
avoid undue burden requires input from stakeholders. In-person meetings, like the one
we are holding today, help us gather information that is critical to our understanding of
how regulations affect not only the banking industry but also the consumers and
communities they serve. They also enable stakeholders to learn from one another and
provide us with multiple perspectives on the complex issues that our regulations address.
Outside of these meetings, we also look forward to receiving written comments in which

-2you can elaborate on how to improve our regulations in more detail than we can cover in
the time we have today.
We recognize that depository institutions come in many sizes, have different
business models, and manage different risks. As a result, it is often necessary to tailor
regulations to the institution. Applying a one-size-fits-all approach to regulations may
produce a small benefit at a disproportionately large compliance cost to smaller
Of particular concern in this regard is the need to ensure our regulations are
appropriately calibrated for smaller institutions. For example, because the largest banks
present the greatest risk to the stability of our financial system, many of the regulations
passed under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(Dodd-Frank Act) are specifically targeted at these firms. It would be counterproductive
to apply those same expectations to small banks. Accordingly, we think it is important to
tailor rules whenever possible to clearly differentiate expectations for different portfolios
of banks and reduce undue burden on community banks. Tailoring regulations may be
more challenging in some areas, such as rules that provide transparency and fairness in
consumer transactions. Those are standards that apply throughout the financial system.
I should note that the Dodd-Frank Act transferred rule-writing authority for many
of the consumer laws and regulations to the Consumer Financial Protection Bureau, or
CFPB. The review of those regulations must be undertaken by the CFPB under
procedures incorporated in the Dodd-Frank Act rather than EGRPRA. However, the
Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal
Deposit Insurance Corporation retained rule-writing authority for the Community

-3Reinvestment Act, and we are interested in your comments regarding ways we can
improve the regulation.
In addition to changes in the regulatory and supervisory landscape, the banking
industry itself has also undergone major changes. Advances in technology and shifts in
industry composition between depository institutions and nondepository companies have
changed the types of financial services and products that are offered, as well as how those
services and products are accessed. We will be very interested in your feedback
regarding how these types of industry changes have impacted the effectiveness of our
Let me conclude by saying that we will consider your comments carefully as the
agencies coordinate to discuss and consider the appropriate action that is likely to best
serve our financial system and the interests of institutions and consumers. The result will
be contained in the agencies’ report to the Congress summarizing the issues raised and
the agencies’ conclusions about the need for regulatory or legislative changes.
Thank you for joining us today.