So Congress just passed a bill that will turn back some of the regulations that Democrats voted in after the crash of 2008. And Trump will definitely sign it.
One Republican voted against it, while some Trump district Democrats voted for it too.
The House on Tuesday passed a bill to loosen federal regulations on the banking sector, securing an election-year legislative accomplishment that is likely to be touted by members of both parties.
The 258-159 House vote sends the bill to President Trump, who has pledged to sign it.
It also sounds like a compromise bill – the GOP didn’t get everything it wanted, but it got a lot:
While the legislation falls well short of Trump’s campaign pledge to “dismantle” Dodd-Frank, it also includes significant changes to the law that have long been sought by U.S. banks and credit unions.
The measure, which had been held up in the House for more than two months after passing the Senate in March, will free dozens of regional banks from stricter Federal Reserve oversight and scores more from lending and data reporting rules.
The Hill reports that it should help some of those Democrats who are in Trump districts for the midterms.
Here’s a description of the legislation:
The measure will exempt dozens of regional banks from tighter regulation by raising the threshold for closer Fed oversight from $50 billion to $250 billion in assets. That frees several major regional banks, including M&T, Citizens, SunTrust, BB&T, Fifth Third, and BMO Financial Corp, from some of Dodd-Frank’s strictest requirements.
Banks below the new $250-billion threshold will no longer be automatically subject to yearly Fed stress tests or higher capital requirements meant to ensure large firms are able to weather severe financial crises.
Those banks below the threshold will also be exempted from submitting a “living will” for Fed approval — a plan that outlines how a bank’s assets could be liquidated upon the firm’s failure without causing a widespread meltdown.
The Fed will still have the power to apply those enhanced prudential standards to banks below the threshold that they deem risky enough to warrant closer oversight.
For smaller firms, the bill exempts banks that extend 500 or fewer mortgages a year from reporting some home loan data to federal regulators under anti-discrimination laws. The bill also broadens the definition of qualified mortgages.
Other aspects of the legislation meant to bolster community banks and credit unions include loosening appraisal requirements for certain mortgage loans and exempting firms with less than $10 billion in assets from the Volcker Rule. Named after former Fed Chairman Paul Volcker, the rule bans banks from making risky trades with their own assets.
I’ve heard that small banks have been getting slaughtered with the new regulations, so this could be a good thing. The economy is already doing well, freeing up the banks could get us on overdrive…