TAILOR Act of 2025
- Bill Number
- H.R. 3380
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-06-04: Placed on the Union Calendar, Calendar No. 104.
- Last Updated
- 2026-05-02T19:06:20Z
AI-Generated Summary
Purpose of the Legislation
The TAILOR Act of 2025 aims to ensure that federal regulations on financial institutions are customized to match the specific risks and operational styles (business models) of different banks and similar entities. This approach seeks to reduce unnecessary regulatory burdens, such as costs and administrative efforts, while maintaining safety and supporting institutions' ability to serve customers effectively.
Key Provisions
- Tailoring Regulatory Actions (Section 2):
- Applies to major federal regulators: Office of the Comptroller of the Currency (OCC), Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Consumer Financial Protection Bureau (CFPB).
- Defines "regulatory action" as proposed, interim, or final rules/regulations (excluding individual enforcement actions against specific institutions).
- Requires regulators, for actions after enactment, to:
- Assess the risk profile (level of potential financial danger) and business model of affected institutions or groups of institutions.
- Customize regulations to minimize burdens (e.g., costs, staffing needs) in ways that fit the institution's risk and model.
- Factors for consideration include:
- Overall impact of regulations on institutions' flexibility to serve customers and local markets.
- Risks from implementation challenges, such as actions by third-party service providers.
- The original law authorizing the regulation, Congress's intent, and the regulation's policy goals.
- Regulators must explain their tailoring process in notices for proposed and final rules.
- Annual reports to Congress (starting one year after enactment) detailing tailoring efforts.
- A one-time review of regulations issued in the 15 years before the bill's House introduction (around 2010–2025), with revisions applied within three years of enactment.
- Reduced Reporting for Certain Banks (Section 3):
- Allows banks qualifying for the Community Bank Leverage Ratio (a simplified capital requirement for smaller banks under prior law) to submit shorter "call reports" (quarterly financial summaries required by law) for the first and third quarters of the year.
- Report on Modernizing Bank Supervision (Section 4):
- Within 18 months of enactment, federal banking agencies (in consultation with state bank supervisors) must report to Congress on updating oversight practices, addressing:
- Evolving bank business models.
- Training and staffing for examiners (government reviewers of bank safety).
- Structure of supervisory activities.
- Better communication between banks and supervisors.
- Use of technology in supervision.
- Unique needs of community banks.
- Needed changes to laws for more effective oversight.
Significant Changes to Existing Law
- Introduces a mandatory "tailoring" requirement for future regulations, which was not explicitly required before, promoting proportionality based on institution size, risk, and operations rather than one-size-fits-all rules.
- Mandates a retrospective review and potential revision of recent regulations (post-2010), building on but expanding prior efforts like those in the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act.
- Establishes reduced quarterly reporting for community banks, easing compliance without altering core reporting laws.
- Requires a new congressional report on supervision modernization, which could lead to future statutory tweaks but does not change laws immediately.
Potential Impacts
- On Government Agencies: Increases workload for tailoring analyses, disclosures, reviews, and reporting to Congress, potentially requiring more resources for analysis and revisions. May streamline long-term supervision by focusing on high-risk areas.
- On Citizens and Financial Institutions: Smaller banks and credit unions could face lower costs and paperwork, enabling better service to local customers (e.g., small businesses, rural areas). Larger institutions might see minimal changes if their risks justify stricter rules. Overall, aims to foster a more efficient financial system but could indirectly affect consumer protections if tailoring reduces oversight.
- On International Relations: Minimal direct impact, as the bill focuses on domestic U.S. financial regulation; however, tailored rules might influence how U.S. banks compete globally by reducing domestic burdens.
Main Stakeholders Affected
- Federal Regulatory Agencies: OCC, Federal Reserve, FDIC, NCUA, and CFPB—directly responsible for implementation, reviews, and reporting.
- Financial Institutions: Especially community banks and credit unions benefiting from reduced burdens and tailored rules; larger banks may see indirect effects through revised regulations.
- State Bank Supervisors: Involved in consultations for the supervision modernization report.
- Congress: Receives ongoing reports, enabling oversight of regulatory tailoring.
- Consumers and Local Markets: Indirectly affected through institutions' improved ability to provide flexible services.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces statutory intent in existing laws by requiring consideration of congressional goals, potentially reducing legal challenges to "overly burdensome" rules. The look-back review could lead to amendments of regulations under the Administrative Procedure Act (governing how agencies make rules), ensuring they align with risk-based principles without altering core safety mandates.
- Constitutional: No direct challenges; supports separation of powers by mandating agencies follow legislative intent, but could invite scrutiny if tailoring is seen as weakening delegated authority for financial stability.
- Political: Promotes regulatory relief for smaller institutions, aligning with efforts to ease post-2008 financial crisis rules (e.g., Dodd-Frank Act). May spark debate on balancing innovation/efficiency against systemic risk prevention, with potential for partisan divides on consumer protection levels.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Loudermilk, Barry [R-GA-11]
Cosponsors (1)
Recent Actions
- 2025-06-04: Placed on the Union Calendar, Calendar No. 104.
- 2025-06-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-135.
- 2025-06-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-135.
- 2025-05-21: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 23.
- 2025-05-21: Committee Consideration and Mark-up Session Held
- 2025-05-14: Referred to the House Committee on Financial Services.
- 2025-05-14: Introduced in House
- 2025-05-14: Introduced in House
Bill Versions
- Taking Account of Institutions with Low Operation Risk Act of 2025 — issued 2025-05-14 — PDF (6 pages)
- Taking Account of Institutions with Low Operation Risk Act of 2025 — issued 2025-06-04 — PDF (8 pages)