A bill rolling back several provisions of the 2010 Dodd-Frank financial reform law passed the Senate Wednesday evening on a vote of 67-31 and is headed to the House, where it could be revised further to include more provisions from the previously House-passed Financial CHOICE Act (H.R. 10) and other, smaller items.
The White House, in a statement Wednesday, said President Donald Trump “looks forward to discussing any further revisions the House is interested in making,” with a goal of “bipartisan, pro-growth Dodd-Frank relief reaching his desk as soon as possible.”
As passed Wednesday, the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) would:
- Raise the threshold at which banks are designated “systemically important financial institutions” (SIFIs) and thus subject to stricter supervision, from $50 billion to $250 billion (dropping about two dozen banks from the threshold, but keeping about one dozen under it), with the Fed authorized to apply stricter supervisory standards to individual banks larger than $100 billion.
- Ease compliance for community banks with less than $10 billion in assets under the “Volcker Rule,” which bars financial institutions from making certain kinds of speculative investments for their own account and which do not benefit their customers.
- Allow small banks to file shorter financial reports with regulators, with some to be examined less often and be released from some capital rules as long as they maintain a relatively high ratio of equity to assets.
- Require credit reporting agencies Equifax, Experian and TransUnion to freeze and unfreeze Americans’ credit reports for free.
- Bar student lenders such as Sallie Mae and Navient from declaring that a student loan is in default when a co-signer dies or declares bankruptcy.
In other provisions, the bill would provide financial institutions relief from certain Truth in Lending Act (TILA) and TILA/Real Estate Settlement Procedures Act (RESPA) integrated mortgage disclosure rule provisions; ease appraisal requirements in rural communities; and ease Home Mortgage Disclosure Act (HMDA) disclosure requirements for lenders originating fewer than 500 open-end lines of credit and closed-end mortgages in the previous two years. It would also exempt some mortgages from a statutory “member business loan” cap imposed on credit unions and make more banks eligible for a longer, 18-month examination cycle.
Additional provisions would give immunity to financial institutions and individuals from lawsuits for disclosure of financial exploitation of senior citizens; clarify and streamline the process for establishing online banking accounts; and require the National Credit Union Administration (NCUA) to annually publish details of its budget, hold a public hearing on it and take comments.