In a speech before the Independent Community Bankers of America, Federal Reserve Governor Daniel Tarullo advocated simplifying oversight of community banks that pose little risk to the U.S. financial system. Tarullo said some capital and examination requirements should be eased if the benefits are outweighed by the banks’ cost of compliance. He said the Volcker rule restrictions on proprietary trading and executive pay requirements “present almost prototypical cases in which minimal potential safety and soundness benefits are outweighed by the compliance costs faced by those thousands of banks." Tarullo said the focus for community bank regulation should shift to potential risks that include high-volatility commercial real estate loans and lenders’ reliance on third-party providers.