Content originally published by Denver Business Journal on March 1st, 2016.

U.S. Rep. Ed Perlmutter (D-Golden) said for the past several years he’s heard a chorus of concerns from community banks.

The regulatory burdens created under the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010, are killing them. They have to spend time and money on compliance personnel and paperwork for things their banks don't do – like investment banking.

“They are facing regulations that are directed at much bigger banks that do trading,” Perlmutter said. “It’s an additional expense.”

Perlmutter has introduced legislation that would provide targeted relief to what he calls a traditional bank. He says those institutions do not pose a systemic risk to the economy.

For 90 percent of Colorado banks the changes would work, he said. Some are good-sized banks, but they don’t participate in trading of stocks.

Perlmutter modeled his “The Traditional Banking Regulatory Relief Act” after a proposal from Tom Hoenig, vice chairman of the Federal Deposit Insurance Corporation and former president of the Kansas City Federal Reserve.

Perlmutter said he wanted community banks to have relief, but wanted to ensure that the banks getting the regulatory relief are solid, and not on the verge of closing. Specifically, a financial institution must hold no trading assets; hold no derivative positions other than interest rates and foreign exchange derivatives; have less than $3 billion in total value of all their derivatives exposures, including cleared and non-cleared derivatives and maintain a ratio of equity-to-assets of at least 10 percent.

Banks at 8 or 9 percent of equity to assets could get the relief, but would have 18 months to get the assets up to 10 percent, he said.

Other measures include relief from company-run stress testing requirements; an increased examination cycle from 12 months to 18 months; and exemptions from submitting certain call report schedules.

“When Dodd-Frank was enacted five years ago, it provided an important regulatory scheme to protect taxpayers and reduce the risk of another financial crisis,” Perlmutter said. “But we must recognize the difference between institutions that conduct their activities in a safe and sound manner and those institutions that expand their activities beyond retail and commercial banking.

“We fashioned this bill to provide relief. But to provide tax payer assurance that banks won’t fail,” he said.

Perlmutter’s bill is not meant to compete against other proposals that aim to tweak or reform Dodd Frank, inlacing a proposal by U.S. Rep. Scott Tipton, R-Cortez, who Small Bank Exam Cycle Reform Act, was unanimously passed by the House in October. The bills would work in tandem, Permutter said.