Dem senator sees no chance for reg relief bill (S. 2155) if House sends it back with changes

Sen. Mark Warner (D-Va.) points out hazards ahead for S.2155 during remarks to bankers Tuesday.

The future of regulatory relief legislation passed by the Senate faces dismal prospects if the House makes changes to the bill and sends it back for reconsideration by the upper chamber, a Senate co-author of the legislation said Tuesday.

Speaking before a conference of the American Bankers Association(ABA) in Washington, Sen. Mark Warner (D-Va.) said the bill – S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act – “will not pass if it comes back to the Senate” from the House. “We’ve stretched this as far we can,” Warner said.

The legislation, passed March 14 by the Senate on a 67-31 vote (and strongly supported by financial institutions), envisions a number of regulatory changes for financial institutions. If enacted, it would:

  • 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.

Since passage by the Senate, however, the legislation has bogged down in the House. Key members there, including House Financial Services Committee Chairman Jeb Hensarling (R-Texas), want to amend the bill with regulatory reform provisions already passed by the House.

But Warner indicated that, from his point of view, the House has already provided plenty of input to the bill. “This bill includes 42 different bills that passed the House,” he said, noting that “262 members of the House have their fingerprints” on portions of the bill.

Warner urged the House to adopt S. 2155 as soon as possible, warning of “choppy times” ahead for Congress, including the impact of the ongoing special counsel’s investigation of Russian interference with the 2016 U.S. election.