Senate gears up to consider changes to financial regulatory laws

Senate legislation widely considered to be a rewrite of the 2010 Dodd-Frank financial regulation law is expected to be considered on the floor this week – and is expected to be approved.

The Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155, authored by Sen. Mike Crapo, R-Idaho) makes a number of key changes to existing laws for financial institution regulation, especially those enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) passed eight years ago.

Among the key provisions in the legislation are those that:

  • Exempt banks with assets of less than $10 billion from the “Volcker Rule,” which prohibits banking agencies from engaging in proprietary trading or entering into certain relationships with hedge funds and private equity funds. Certain banks are also exempted by the bill from specified capital and leverage ratios, with federal banking agencies directed to promulgate new requirements.
  • Allow institutions with less than $10 billion in assets to waive ability-to-repay requirements under the Truth in Lending Act for certain residential-mortgage loans. Other mortgage lending provisions related to appraisals, mortgage data, employment of loan originators, manufactured homes, and transaction waiting periods are also modified.
  • Modify enhanced prudential regulation of financial institutions, such as those related to stress testing, leverage requirements, and the use of municipal bonds for purposes of meeting liquidity requirements.
  • Require credit reporting agencies to provide credit-freeze alerts.

The legislation also includes consumer credit provisions related to senior citizens, minors, and veterans.

The first procedural vote on the bill is expected Tuesday. Supporters of the legislation are predicting its passage with 65 to 70 affirmative votes.

S.2155 – Economic Growth, Regulatory Relief, and Consumer Protection Act