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1 H.R. 4296, a Bill to Place Requirements on Operational Risk Capital Requirements for Banking Organizations Established by an Appropriate Federal Banking Agency 1 (February 21, 2018)

handle is hein.congrec/rqopskca0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE February 21, 2018 H.R. 4296 A bill to place requirements on operational risk capital requirements for banking organizations established by an appropriate Federal banking agency As ordered reported by the House Committee on Financial Services on November 15, 2017 SUMMARY H.R. 4296 would direct federal banking regulators to revise one of the formulas used to calculate the minimum amount of capital held by certain large, systemically important banks. Specifically, the bill would change the method banks use to estimate operating risk-the risk of losses stemming from inadequate or failed internal controls, fraud or errors caused by people and systems, or external events such as cyberattacks. Regulators currently require banks to estimate operating risk based in part on historical experience. Under the bill, such risk would be calculated largely on the basis of forward-looking models that reflect each bank's business activities. CBO estimates that enacting H.R. 4296 would increase the deficit by $22 million over the 2018-2027 period. That figure includes an increase of $26 million in direct spending and an increase of $4 million in revenues. Because enacting the bill would affect direct spending and revenues, pay-as-you-go procedures apply. CBO estimates that enacting H.R. 4296 would not increase net direct spending or on- budget deficits by more than $2.5 billion in one or more of the four consecutive 10-year periods beginning in 2028. H.R. 4296 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). ESTIMATED COST TO THE FEDERAL GOVERNMENT The estimated budgetary effect of H.R. 4296 is shown in the following table. The costs of the legislation fall within budget function 370 (advancement of commerce).

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