Zions, a Salt Lake City-based regional bank, is set to be freed from oversight by the Federal Reserve, thanks to a decision announced Wednesday by federal regulators.
The Financial Stability Oversight Council, the supergroup of regulators created by the 2010 Dodd-Frank law, announced that it had voted unanimously to allow Zions to avoid Fed scrutiny after it reorganizes its business structure.
“The council conducted a careful analysis of Zions’ business and found that there is not a significant risk that Zions could pose a threat to U.S. financial stability,” Treasury Secretary Steven Mnuchin, the council’s chairman, said in a statement.
The council’s decision, which still has to be finalized, means that the the bank can go forward with a plan to merge its parent holding company back into its banking subsidiary. That subsidiary would be subject to regulation by the Office of the Comptroller of the Currency, but not the Fed, which is responsible for regulating bank holding companies.
Zions is the first bank to have its petition for regulatory relief granted by the council.
The bank said in a statement that the result would be “the elimination of a great deal of duplicative regulatory effort.” If all goes to plan, the merger would go through in September.
CEO Harris Simmons said that the council’s decision would allow the bank to better serve its customers.
With $65 billion in assets and business across western states, Zions is the kind and size of regional bank that also recently won regulatory relief in bipartisan legislation signed by President Trump.
Dodd-Frank originally provided that banks of its size that received TARP bailout funds face Fed regulation, including regular stress tests and other forms of stringent oversight.
