The Federal Deposit Insurance Corporation (FDIC) is considering indexing certain regulatory thresholds, a move that could reshape how banks of all sizes experience compliance. The American Bankers Association (ABA) and state bankers associations, including the Idaho Bankers Association, submitted comments that voiced support while urging refinements to ensure the policy meets its intended goals.
What Indexing Really Means
Regulatory thresholds set the point where additional rules and requirements apply. When these thresholds remain static, inflation and economic growth push more institutions across the line, creating heavier regulatory burdens that were never intended for them. Indexing ties these thresholds to measures like GDP or inflation, keeping regulation aligned with the economy.
Why Bankers Are Paying Attention
Bankers argue that indexing could:
- Reduce unintended drag from outdated thresholds.
- Provide predictability and fairness by adjusting rules automatically.
- Ensure rules match their purpose by using the right metric—GDP for asset-based measures, inflation for consumer-facing ones.
- Smooth transitions with phase-in mechanisms, so banks aren’t jolted into new categories overnight.
- Promote consistency by coordinating across agencies.
The Bottom Line
If executed well, indexing can modernize regulatory oversight, reduce unnecessary burdens, and restore fairness to the system.