Description:
H.R. 1309 would amend current law to change the process and procedures that federal regulators follow for determining which bank holding companies should be designated as systemically important financial institutions (SIFIs). Under current law, all banks with consolidated assets exceeding $50 billion are automatically designated as SIFIs. H.R. 1309 would repeal the automatic designation for most banks and establish a new process under which such firms would be designated on a case-by-case basis.
Based on information from the federal financial regulators, CBO estimates that enacting the legislation would increase net direct spending by $98 million and increase revenues by $13 million over the next 10 years, leading to a net increase in the deficit of $85 million over the 2017-2026 period. Some of that cost would be recovered from financial institutions in years after 2026. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
CBO estimates that enacting the legislation would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2027.
H.R. 1309 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA).
CBO expects the Financial Stability Oversight Council (FSOC) would increase assessments on financial institutions to offset the costs of implementing H.R. 1309, which would increase the cost of an existing mandate on private entities required to pay those assessments. Based on information from FSOC, CBO estimates that the incremental cost of the mandate would fall well below the annual threshold for private-sector mandates established in UMRA ($154 million in 2016, adjusted annually for inflation).
