The Republican leader of a key Senate panel has struck a deal with moderate Democrats on easing regulatory burdens for financial firms, increasing the chances that Congress will make its first major changes to rules passed in the wake of the 2008 financial crisis. Still, it does include some minor tweaks that Wall Street has long sought. Designation as systemically important subjects banks to stricter oversight and higher compliance costs.
The Dodd-Frank Act gave the Federal Reserve authority to exercise enhanced oversight over banks with $50 billion or more of assets.
The bill would exempt banks with less than $250 billion in assets - including BB&T, SunTrust Banks and American Express - from heightened regulatory scrutiny, in a move that could redraw the domestic USA banking landscape by reducing costs and unleashing a wave of mergers and acquisitions activity. The Senate bill, which is more limited in scope than the House's original proposal, has nine Democratic co-sponsors, meaning it is likely to pass into law.
"The bipartisan proposals on which we have agreed will significantly improve our financial regulatory framework and foster economic growth by right-sizing regulation, particularly for smaller financial institutions and community banks", Crapo, an Idaho Republican, said in the statement. "I thank Senator Corker for his hard work and leadership in helping to reach this agreement, and look forward to continuing our work to achieve a robust, bipartisan legislative product". The $250 billion threshold would reduce that to about a dozen of the largest banks.
Democrats: Joe Donnelly (D-Ind.), Heidi Heitkamp (D-N.D.), Jon Tester (D-Mont.), Mark Warner (D-Va.), Tim Kaine (D-Va.), Angus King (I-Maine), Joe Manchin (D-W.Va.), Claire McCaskill (D-Mo.), and Gary Peters (D-Mich.).
"I understand my colleagues' interest in agreeing to this legislation, but disagree on the wisdom of rolling back so many of Dodd-Frank's protections with nearly no gains for working families", he said in a statement.