Regional banks and mutually owned deposit takers have been given a reprieve on having to comply with the Turnbull government's new Bank Executive Accountability Regime (BEAR).The BEAR reforms, which will give the Australian Prudential Regulation Authority special powers to monitor and restrain executive pay at financial institutions, will not apply to regional banks and credit unions until 1 July 2019.However, the four major banks - NAB, Westpac, CBA and ANZ - will have to fall into line with the new framework from the start of July this year.The decision to defer the implementation date for small banking institutions came after government amendments to the enacting legislation were supported by the Labor opposition in the senate.Under the changes, APRA will have the power to direct banks to reduce the performance pay of senior executives if they fail to meet expectations of "due skill, care and diligence".The prudential regulator will also have the power to remove senior executives from their roles at a licensed bank if it believes there has been "systemic poor conduct".Mutual banks and credit unions mounted a concerted lobbying effort to secure the reprieve, arguing that the schedule for implementing the reforms would place an unfair cost burden on them.The lobbying campaign was led by the Customer Owned Banking Association, which yesterday welcomed bi-partisan support for the extension of time."It's very pleasing that the Government and the Opposition recognise the importance of customer owned banking and the vital role it plays in delivering diversity and competition in retail banking," COBA CEO Michael Lawrence said."MPs have also recognised that the regulatory compliance burden is effectively a competitive advantage for the major banks."This is because major banks have vastly greater resources than their smaller competitors to quickly respond to new regulatory obligations."Lawrence said the extra time would help small institutions prepare for the accountability regime in an orderly way that would minimize the compliance costs of COBA members.Major banks - led by the National Australia Bank - have warned that the reforms could under APRA's relationships with institutions.In a submission published last August NAB said the accountability framework could "result in a fundamental and detrimental shift in regulation of the financial services industry in Australia".