On May 26, 2010, the Senate released the official copy of the Senate-passed “Restoring American Financial Stability Act of 2010.”  Before becoming law, the senate-approved bill will need to be reconciled with the previously House-passed “Wall Street Reform and Consumer Protection Act of 2009.”  We understand the White House is pushing for reconciliation of the two bills before the Fourth of July congressional recess.

The reconciliation process can lead to dramatic changes in the final legislation, including changes and additions that are not currently reflected in the house or senate versions.  For example, in 1980, the increase in FDIC insurance to $100,000 was introduced for the first time in the reconciliation process.

A few specific provisions that may be of interest to community bankers:

  • Section 171 is the so-called “Collins Amendment” which would eliminate the Tier 1 capital treatment for trust preferred securities.
  • Section 312 provides for the transfer of powers and duties of the Office of Thrift Supervision to the Office of the Comptroller of the Currency (for federal thrifts), the Federal Reserve (for thrift holding companies), and the FDIC (for state thrifts).
  • Section 331 provides that the FDIC assessment base will be calculated based on asset size rather than deposit base.
  • Section 332 replaces the Director of the Office of Thrift Supervision with the Director of the Consumer Financial Protection Bureau on the Board of the FDIC.
  • Section 341 eliminates the ability to issue new federal thrift charters.
  • Section 611 applies the national bank lending limits to state banks.
  • Section 613 permits interstate branching by national and state banks.
  • Section 971 requires public companies listed on a stock exchange to use a majority vote standard for uncontested elections of directors.
  • Title X, starting at Section 1001, is the “Consumer Financial Protection Act of 2010” and provides for the establishment of the Bureau of Consumer Financial Protection within the Federal Reserve.