House sends bill loosening banking regulations to Trump's desk

Angelo Anderson
May 23, 2018

One would ease disclosure requirements for banks on mortgage loans.

SACRAMENTO, CA- California Attorney General Xavier Becerra today issued the following statement in response to the 258-159 vote by the U.S. House of Representatives to repeal parts of the Dodd-Frank Act. "They haven't been able to serve these people to get them into homes and get them into cars".

"This is a legislative win for the banks, but the biggest deregulatory bang for the buck is changing the referees, not the rules", said Dan Ryan, PwC Banking & Capital Markets Leader. Senate Democrats who backed the plan sponsored by Banking Committee Chairman Mike Crapo, an Idaho Republican, have said they will oppose further changes.

The bill, which was approved by the Senate in March after securing the backing of 17 Democrats, marks the first attempt to revise rules that aimed to prevent a repeat of the crisis that saw Wall Street lenders bailed out to the tune of $700 billion (£520.8 billion).

Moderate Democrats' support for the bill has sparked fights with progressives including Senator Elizabeth Warren of MA, who say the bill is a gift to bank lobbyists.

Virginia Democratic Sen. Mark Warner, a member of the banking panel, said the bill was a compromise measure that didn't include "everything Democrats wanted nor everything Republicans wanted", but would help small lenders provide mortgages and credit to Americans and small businesses in his home state and elsewhere.

The House passage comes after disagreement between conservative House members and a more moderate bipartisan group that helped pass the bill in the Senate.

But Senate Democrats insisted they would reject any of those modifications, and Hensarling relented after securing a promise from Senate Majority Leader Mitch McConnell, a fellow Republican, that the Senate would consider some of his measures. Another would allow more companies to file confidential initial public offerings without divulging all their sensitive financial information right away. "If this bill had been about nothing but community banks, I think it would sail through with very little opposition", she said on Fox News Sunday.

It is a far cry from the repeal that Trump pledged on the campaign trail, leaving largely untouched the core Dodd-Frank provisions created to ensure financial stability and other rules most hated by banks and conservative Republicans.

The legislation leaves only about a dozen financial institutions automatically subject to the strictest rules. But there are fewer wins for the country's biggest banks whose failure could endanger the entire financial system if they go under.

Banks with assets below $10 billion would be subject to simplified regulations.

Institutions like JPMorgan Chase, Bank of America and Wells Fargo would continue to abide by tougher rules. Currently, any bank that holds $50 billion in assets is a SIFI. And they will have to take the Fed's bank health test only periodically, not once a year. That will be a reprieve for millions of Americans whose data was exposed in the breach of Equifax, disclosed past year. Under Dodd-Frank, banks with $50 billion or more in assets are in that category and fall under the jurisdiction of the Financial Stability Oversight Council.

Other reports by Iphone Fresh

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