H.R.3380 - Taking Account of Institutions with Low Operation Risk Act of 2025; TAILOR Act of 2025 (119th Congress)
Summary
H.R. 3380, the TAILOR Act of 2025, aims to modify the regulatory landscape for financial institutions by requiring federal regulatory agencies to consider the risk profiles and business models of institutions when creating regulations. This bill also mandates reduced reporting requirements for community banks and a report on modernizing bank supervision. The bill seeks to tailor regulations to minimize the impact on institutions, particularly smaller ones, while still achieving regulatory objectives.
Expected Effects
If enacted, H.R. 3380 would lead to a more nuanced regulatory environment for financial institutions. Community banks would likely experience reduced reporting burdens. Furthermore, the bill could lead to revisions of existing regulations to better align with the risk profiles of different institutions.
Potential Benefits
- Reduced Regulatory Burden: Tailoring regulations could reduce compliance costs for smaller institutions.
- Flexibility for Institutions: Institutions may have more flexibility to serve customers and local markets.
- Modernized Supervision: The report on modernization of supervision could lead to more effective regulatory practices.
- Community Bank Support: Reduced reporting requirements specifically benefit community banks.
- Risk-Based Regulation: Regulations will be more closely aligned with the actual risks posed by different institutions.
Most Benefited Areas:
Potential Disadvantages
- Potential for Regulatory Loopholes: Tailoring regulations could create loopholes or inconsistencies.
- Increased Complexity: Implementing tailored regulations may increase administrative complexity for regulatory agencies.
- Risk of Under-Regulation: Focusing too much on reducing burden could lead to under-regulation of certain institutions.
- Implementation Challenges: Ensuring effective tailoring and preventing third-party actions from undermining it could be difficult.
- Reporting Burden: Regulatory agencies will have to report to congress annually, increasing their workload.
Constitutional Alignment
The bill appears to align with the Constitution's broad goals of promoting the general welfare by attempting to create a more efficient and tailored regulatory environment for financial institutions. Congress's power to regulate commerce (Article I, Section 8) provides the basis for federal financial regulation. The requirement for reports to Congress ensures legislative oversight, consistent with the principle of checks and balances. However, the specific impact on individual liberties or states' rights would depend on the implementation of the tailored regulations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).