WASHINGTON - Federal regulators on Tuesday unveiled their latest plan to cut red tape for the industry, but some supporters acknowledged that banks and thrifts would not realize the benefits for years, if ever.
The Federal Deposit Insurance Corp. was the first to formally issue the three-year plan, in which bank, thrift, and credit union agencies will seek comments on regulations the industry considers too burdensome. Regulators would then ask Congress to alter or eliminate them.
Before the FDIC board acted, Comptroller of the Currency John D. Hawke Jr., who is one of the board's four members, downplayed expectations and noted the failures of similar efforts.
"I am concerned that we not raise expectations too high with what the outcome is going to be," Mr. Hawke said.
Those sentiments were echoed by other policymakers and industry representatives, who praised the plan's intent but questioned how long the process would take and whether there would be any concrete results.
FDIC Chairman Don Powell said that he had often listened to policymakers promise help, without any results, but that this time would be different.
"As a former banker, I've heard of regulatory relief all my life, but I have not seen any real benefit," Mr. Powell said. "In fact, there are more regulations rather than less. And everybody likes to talk about it - it is a popular subject. But if you look at the history and reality of what actually happened, it is not a good picture. But we are dead serious about this. … The effort is there. The intentions and effort, commitment, and passion are there."
Mr. Powell, who had said at the board meeting that three years was too long a time frame and that he hoped it could get done sooner, urged the FDIC staff to move as quickly as possible.
FDIC Vice Chairman John Reich, who spearheaded the effort, said three years was reasonable and that it would have been difficult for industry officials to comment simultaneously on all regulations. Instead, he said, the plan provides for a rolling review as agencies seek comments every six months on particular items.
The industry will have 90 days to respond each time, after which the agencies will summarize the comments and make their suggestions to Congress. Mr. Reich said he hoped the recommendations could be acted on by Congress as it pursues regulatory relief.
"It will be a gradual effort over time," Mr. Reich said. "I would anticipate this will be a series of reports that probably will be released every six months over the next three years. I think it hopefully will be a part of annual regulatory relief efforts beginning next year."
He said the agencies will seek comment on the first batch of regulations "in the next few weeks," with a report expected near yearend.
Kenneth Guenther, the president of the Independent Community Bankers of America, welcomed the plan but said it was not "ambitious" enough because of the long time frame.
