WASHINGTON – As the House Financial Services Committee prepares to markup H.R. 1309, The Systemic Risk Designation Improvement Act of 2015, sixteen regional banks and financial institutions sent committee members a letter supporting the bipartisan legislation that will base regulation of financial institutions across the country on risk rather than an arbitrary asset level.

With 112 cosponsors, the Systemic Risk Designation Improvement Act would update current Dodd-Frank Act regulations that base risk on an automatic and arbitrary $50 billion asset threshold with a multi-factored test adopted and used by regulatory agencies for other purposes.

The financial institutions support the Systemic Risk Designation Improvement Act of 2015, bipartisan legislation that would more closely correlate the regulation of financial institutions based on the potential systemic risk a bank poses to the financial system rather than arbitrary asset size. This test, strongly supported by regulators and academics, would evaluate systemic risk of financial institutions on their complexity, global activity, size, interconnectedness, and substitutability – not a $50 billion arbitrary threshold.

The sixteen financial institutions signing the letter provide traditional banking services, helping customers with their deposits, savings and loans.

In their letter, the banks note, “Studies by the U.S. Department of Treasury show that regional banks pose no systemic threat to the financial system. A Federal Financial Advisors economic study earlier this year detailed that a revision of the systemic risk threshold to base regulation on risk instead of an arbitrary asset number could increase lending to consumers and businesses by as much as $14 to $20 billion.”

The House Financial Services Committee will mark up Rep. Blaine Luetkemeyer’s legislation on Tuesday, November 3. The full letter is available here.

About the Regional Bank Coalition: The Regional Bank Coalition is a group of regional banks that support regulation based on risk and business model to ensure safety and soundness. For more information, visit www.regionalbanks.org or follow on Twitter @rgnlbanks.