H.R.3380 - Taking Account of Institutions with Low Operation Risk Act of 2025; TAILOR Act of 2025 (119th Congress)
Summary
H.R.3380, also known as the TAILOR Act of 2025, aims to modify the regulatory landscape for financial institutions. It requires federal financial regulatory agencies to consider the risk profiles and business models of institutions when taking regulatory actions. The bill also mandates reduced reporting requirements for community banks and a report to Congress on modernizing bank supervision.
Expected Effects
The bill is likely to result in a more tailored regulatory environment for financial institutions, particularly smaller community banks. This could lead to reduced compliance costs and increased operational flexibility for these institutions. The required reports to Congress could also prompt further legislative or regulatory changes in the future.
Potential Benefits
- Reduced regulatory burden for smaller financial institutions, potentially freeing up resources for lending and investment.
- Increased flexibility for institutions to serve their customers and local markets.
- More efficient use of resources by regulatory agencies, focusing on higher-risk areas.
- Enhanced communication and collaboration between banks and supervisors.
- Modernization of bank supervision practices through the adoption of new technologies.
Potential Disadvantages
- Potential for increased risk-taking by financial institutions due to reduced regulatory oversight.
- Difficulty in accurately assessing and tailoring regulations to the diverse risk profiles of different institutions.
- Possible inconsistencies in regulatory application across different agencies.
- Increased complexity in the regulatory process due to the need for tailoring.
- Potential for regulatory capture, where institutions unduly influence the tailoring process.
Constitutional Alignment
The bill appears to align with the Constitution, particularly Article I, Section 8, which grants Congress the power to regulate commerce. By tailoring regulations to different types of financial institutions, the bill seeks to promote economic activity and stability, which falls under the purview of congressional authority. There is nothing in the bill that appears to violate individual rights or freedoms as protected by the Bill of Rights.
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).