A key U.S. Senate panel has cleared a bill that could bring financial firms a significant chunk of the regulatory relief they've sought since the Dodd-Frank Act became law in 2010.
Bipartisan legislation advanced Tuesday by the Senate Banking Committee would revise many parts of the sweeping 2010 overhaul, particularly those pertaining to small and regional banks. It would free midsize lenders from some of the strictest post-crisis oversight and cut compliance costs for community banks. It also includes some tweaks that Wall Street has sought, including a change to how banks classify municipal bonds.
The bill, sponsored by Sen. Mike Crapo, R-Idaho, the banking panel's chairman, has backing from several Democrats. That support from across the aisle means the proposal represents the financial industry's best hope in years of dialing back rules.
Tuesday's vote moves the bill to the full Senate, where it will need to gain approval before it can be merged with a measure from the U.S. House. Rep. Jeb Hensarling, the Texas Republican who leads the Financial Services Committee, has won House passage of legislation that goes far beyond Crapo's in making changes to Dodd-Frank, such as gutting the Consumer Financial Protection Bureau and repealing Volcker Rule trading restrictions. Democrats who signed onto Crapo's bill would unlikely agree with Hensarling's changes, which passed the House in a party-line vote.
The Senate bill would raise to $250 billion from $50 billion the asset threshold for banks to be subjected to stricter Federal Reserve supervision for systemically important financial institutions. American Express Co., BB&T Corp., KeyCorp and other companies freed from the higher compliance costs associated with being deemed too big to fail would still be subject to some Fed requirements, such as stress tests to assess whether they can endure severe economic slumps.
Crapo's legislation also gives firms like JPMorgan Chase & Co. and Citigroup more incentive to invest in municipal bonds by letting them count the securities in required stockpiles of assets that could be sold to provide funding in a crisis. Custodial banks such as State Street Corp. and Bank of New York Mellon Corp. would see relief from some capital requirements.
Under the Senate plan, banks with less than $10 billion in assets would be exempt from the Volcker Rule restrictions on making market bets with their own capital.
Business on 12/06/2017
Print Headline: Bill easing Dodd-Frank bank rules gains bipartisan support in Senate