On Tuesday, December 5, 2017, the U.S. Senate’s Banking Committee marked up the Economic Growth, Regulatory Relief and Consumer Protection Act, S. 2155, which is bipartisan legislation set to repeal the Dodd-Frank Act. The bill is co-sponsored by twenty Senators–10 Republicans and 10 Democrats–and comes on the tails of the failed, and more sweeping, U.S. House of Representative’s Financial CHOICE Act, H.R.10, which was similarly posed to roll back Dodd-Frank. Key provisions of the Banking Committee’s bill include reducing the number of financial institutions that are required to undergo stress tests under Dodd-Frank by raising the asset threshold from $50 billion to $250 billion, reducing regulations for smaller banks, and implementing consumer protections after data breaches that include measures to help consumers freeze and unfreeze credit.
According to Republicans, the “legislation right-sizes regulation for smaller financial institutions and includes important consumer protections for veterans, senior citizens and victims of fraud.” The bill is backed by various industry groups including the Mortgage Bankers Association, U.S. Chamber of Commerce, National Association of Home Builders, Independent Community Bankers of America, Credit Union National Association, Bipartisan Policy Center, Consumer Bankers Association, Insured Retirement Institute, American Bankers Association, National Association of Federally-Insured Credit Unions, and Financial Services Roundtable. The Mortgage Bankers Association issued the following statement: “I want to commend Chairman Mike Crapo (R-Idaho) for reaching a bipartisan compromise on regulatory relief legislation designed to lessen some burdens on lenders, allowing them to better serve their customers and consumers. In particular, MBA is glad to see the inclusion of language amending the SAFE Act to provide increased job mobility for loan originators, as well as language to address concerns with PACE lending, HMDA, and the TILA/RESPA integrated disclosure.”
In opposition to the bill, Banking Committee ranking member Senator Sherrod Brown (D-OH) remarked that the bill “puts taxpayers at risk of another bank bailout and puts homeowners at risk of the same traps that led to the foreclosure crisis–all while doing virtually nothing for hardworking Americans.” He further warned that with the passage of Dodd-Frank, Congress implemented stress tests “to ensure that banks can weather the next downturn without putting the economy at risk. … This bill weakens stress tests for all large banks–banks that together took $239 billion in taxpayer bailouts last time around.”
During Tuesday’s markup, the Banking Committee adopted a Manager’s Amendment (i.e. multiple individual amendments agreed to in advance), which included additional consumer protections, technical changes, credit bureau reforms, and National Credit Union Administration budget transparency assurances. The Committee then voted for the bill to proceed to the full Senate with a 16 to 7 vote. At this point in the legislative process, the Economic Growth, Regulatory Relief and Consumer Protection Act shows more promise than the House’s Financial CHOICE Act due to its bipartisan support. LenderLaw Watch will provide updates on the bill’s advancement and amendments.