A bipartisan deal has been cut in the Senate Banking Committee to exempt over a dozen middle-sized banks from the strict regulations enacted by the Dodd-Frank Act in 2010. Under the law a bank is automatically considered a significantly important financial institution (SIFI) when its assets are $50 billion.
The SIFI designation subjects banks to very strict risk mitigation requirements, strict federal stress tests and stricter oversight by the Federal Reserve.
Idaho Republican Sen. Mike Crapo chairs the banking committee. His bill raises that figure to $250 billion from the $50 billion. And he has nine Democrats co-sponsoring his bill and eight other Republicans — seven of whom are on the banking committee.
Under the agreement, banks with less than $100 billion in assets will be immediately dropped from federal oversight. “The bipartisan proposals on which we have agreed will significantly improve our financial regulatory framework and foster economic growth by right-sizing regulation, particularly for smaller financial institutions and community banks,” Crapo said.
Included in the bill are some measures to reduce regulations on community banks and to limit report collection data. It also gives consumers expanded access to mortgages.
Crapo did not get support from the ranking member of his committee Sen. Sherrod Brown of Ohio. They worked on a deal for quite awhile but they never could come to terms. In the end, Brown said he can’t support the bill.
“I understand my colleagues’ interest in agreeing to this legislation, but disagree on the wisdom of rolling back so many of Dodd-Frank’s protections with almost no gains for working families. Banks made record profits last year and it looks like executives will get bigger bonuses this year. Hourly wages have stagnated for 40 years, and too many Americans are still feeling the impact of the 2008 financial crisis,” Brown said.
And then he asked, “Who needs help the most?”
The bill still has to get through the full Senate but with the nine Democrats supporting the idea, a Democrat filibuster is not likely to succeed.
Source link: The Hill