Senate Takes First Step to Pass Bill Overhauling Dodd-Frank

Marsha Scott
March 10, 2018

The legislation makes significant changes to the Dodd-Frank Wall Street Consumer Protection Act of 2010 by raising the compliance threshold from $50 billion to $250 billion.

Democratic senators who are facing re-election this year in states won by Donald J. Trump in 2016 have been especially supportive of the bill, but on Tuesday they said politics was not a factor. It will then go to the House, where lawmakers would also have to approve it for it to reach Trump's desk. The bill would raise this threshold to $250 billion, meaning that only a handful of the biggest banks would face the toughest oversight.

"This banking bill is a disaster".

The legislation exempts almost a dozen financial companies with assets between $50 billion and $250 billion from enhanced scrutiny by the Federal Reserve.

With the Senate expected to consider the legislation this week, Warren said she work to ensure it does not become law by giving a series of floor speeches that highlight how it will impact consumers, benefit big banks and fit into the history of bank deregulation. They say the legislation will help local credit unions and small community banks that have struggled to adhere to strict regulations aimed at bigger banks.

"The lobbyists speak loud here", she said.

"The American people remember". As a result, many families lost their homes as well as their life savings when the stock market crashed.

The bill would also change how the "supplementary leverage ratio" is calculated, a key capital requirement for the biggest banks that was created to ensure those financial institutions could handle a financial disaster.

Democrat of Montana last week at a Senate Banking Committee hearing. Credit Erin Schaff for The New York
Democrat of Montana last week at a Senate Banking Committee hearing. Credit Erin Schaff for The New York

Pat Toomey, a Pennsylvania Republican who chairs a key banking subcommittee, touted the measure as "progress" toward providing relief from regulation for small credit unions and regional banks.

Even former MA congressman Barney Frank, a Dodd-Frank co-author, concedes "that his bill was too harsh on smaller banks, which are struggling with regulatory burdens while the big banks can deploy an army of attorneys to ease compliance".

Tester, however, said Senate Democrats would abandon the bill if House lawmakers add more radical de-regulatory language. "In Montana, we went from 72 community banks to 47". "And that pressure on the Fed will lead to a systematic weakening of the rules for all the big banks".

The bill doesn't go almost as far as many Republicans and some in the finance industry would like, leaving big Wall Street firms in particular close to empty handed.

Progressive Democrats also seized on a report by the Congressional Budget Office released Monday evening that showed the bill would increase the federal deficit by $671 million and increase the likelihood a Wall Street mega-bank will fail.

"CBO estimates that the probability is small under current law and would be slightly greater under the legislation", it said.

"At a time when lending discrimination is running rampant, this bill would undercut reporting requirements that enable the federal government to enforce fair lending laws", Warren said. Make no mistake: The bill puts America at risk of another recession. "That's just fundamentally wrong". "Particularly when it comes to how we collect data and how we deal with consumers".

Warren and Brown both expressed frustration with those moderate Democrats for providing Republicans with the necessary votes to pass the bill.

More news: Thousands of eggs, embryos possibly damaged at OH hospital
More news: Eleven nations - but not US - to sign Trans-Pacific trade deal
More news: It's Prime time at more Whole Foods Markets

Other reports by MaliBehiribAe

Discuss This Article