WASHINGTON In
testimony before the Senate Banking Committee today, acting Comptroller of the
Currency Julie L. Williams spoke in favor of regulatory burden relief
legislation and emphasized to a Senate panel that efforts to streamline massive
consumer disclosure requirements present an opportunity both to reduce
regulatory burden and improve the quality of information provided to consumers.
Today our system
imposes massive disclosure requirements -- and massive costs -- on financial
institutions, Ms. Williams said. But
do these requirements effectively inform consumers?
Federal banking
agencies have broken new ground by employing consumer testing as an essential
part of the interagency project to simplify GLBA privacy notices -- a project
that has the potential to produce more effective and meaningful disclosures for
consumers and reduced burden on institutions that generate and distribute
privacy notices, Ms. Williams noted.
We are asking
consumersdirectly through consumer focus groups and testingwhat they most
want to know and what style of disclosure is most effective in communicating
that information to them, Ms. Williams said.
We need to do more of this.
Ms. Williams also
expressed concern that small institutions may not have the resources to absorb
regulatory or overhead expenses without adversely affecting the quality and
delivery of the services they provide.
We need to
recognize that the risks presented by certain activities undertaken by a
community bank are simply not commensurate with the risks of that activity
conducted on a much larger scale, Ms. Williams said. One-size-fits-all simply may not be a risk-based -- or sensible
-- approach to regulation in many areas.
A distinction needs
to be made between banks based on the size, complexity and scope of their
operations in framing the regulatory approach, according to Ms. Williams.
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