Trump signs into law reg relief package (S. 2155); calls it ‘commonsense’ action

A financial institutions “regulatory relief” bill that exempts more banks from proprietary trading restrictions, waives certain mortgage lending rules and eases some banks’ stress-test and capital requirements was signed into law by President Donald Trump Thursday at the White House.

In a statement following the bill signing, the White House said the legislation provides “commonsense regulatory relief for community banks, mid-sized banks, regional banks, and credit unions” that will “better tailor regulations to the risks posed by these institutions improving the safety and soundness of the regulatory system.” The statement added that the legislation “removes certain regulations that impede the ability of these institutions to serve the financial needs of consumers.”

The bill won final passage in the House Tuesday on a vote of 258-159, with 225 Republicans and 33 Democrats voting in favor.

S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, was approved by the Senate in March on a vote of 67-31. The White House said the president would sign the measure if it reached him unchanged from the Senate version.

S. 2155 does the following:

  • Raises 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.
  • Eases 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.
  • Allows 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.
  • Requires credit reporting agencies Equifax, Experian and TransUnion to freeze and unfreeze Americans’ credit reports for free.
  • Bars student lenders from declaring that a student loan is in default when a co-signer dies or declares bankruptcy.

In other provisions, the measure provides 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 eases 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 also exempts 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 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.

White House statement: President Donald J. Trump Supports Regulatory Reforms For Community Banks, Credit Unions, and Consumers

S. 2155 summary and bill text