Trump signs bill easing USA bank rules into law

Galtero Lara
May 26, 2018

Trump thanked the lawmakers at the event for playing a role in moving the legislation through the Senate and later the House.

Trump savored the legislative triumph Thursday. They point to increases in banks' lending and profits since Dodd-Frank's enactment in 2010 as debunking the assertion that excessive regulation of the banking industry is stifling growth. The bill would raise that threshold to $250 billion in assets, potentially allowing several high-profile financial institutions, including American Express and Ally Financial, to escape the extra regulatory scrutiny. Banks between $50 billion and $100 billion in assets are left out of the regime, while the Federal Reserve can decide if those between $100 billion and $250 billion still face enhanced supervision.

President Donald Trump has signed into law a measure loosening key restraints for banks that came in the wake of the 2008 financial crisis and Great Recession. "If you're in trouble and you're a bank, the regulators are already on you for compliance issues". Banks larger than $50 billion dollars in capital were considered too critical to the USA financial system to fail without catastrophic results to the economy. Smaller institutions also won some relief from escrow and appraisal requirements, as well as from certain measures of the Home Mortgage Disclosure Act. Republicans overwhelmingly supported the bill, while Democrats remain divided over it.

The law also exempts banks with less than $10 billion in assets from the proprietary trading ban known as the Volcker Rule (named for former Fed Chairman Paul Volcker). The smaller banks are now no longer subject to stress tests. "And honestly, a lot of great Democrats knew that it had to be done and they joined us in the effort".

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Among those attending the ceremony were Crapo, House Financial Services Committee Chairman Jeb Hensarling and Sen. Hensarling suggested in April that he could support the Senate-passed bill as long as there were "other pathways" to advance more financial reforms not included in the Senate bill. In return, Senate leaders will attempt to move some additional House reg relief provisions separately.

Supporters say the measure's benefits are limited nearly exclusively to small and regional banks, but critics challenge that argument, noting a Congressional Budget Office assessment that there's about a 50 percent chance that behemoths JPMorgan and Citibank could take advantage of provisions aimed at helping smaller firms.

Joe Adler is the Washington bureau chief for American Banker.

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