Senate Takes First Step to Pass Bill Overhauling Dodd-Frank

There’s nothing to fear about modest banking reform

Last week, Senate Majority Leader Mitch McConnell filed cloture on the bill. The Senate bill would raise to $250 billion from $50 billion the asset threshold for banks to be subjected to stricter Federal Reserve supervision for systemically important financial institutions.

Lobbyists have been pushing in recent days for tweaks to the bill that would make it more favorable to big banks, but Senate Democrats have insisted that they will oppose anything that is a giveaway to banking giants such as Citigroup, JPMorgan Chase & Company and Goldman Sachs. Opponents say it would weaken the oversight needed to stave off the type of risky lending and investing that brought the USA economy to its knees.

"We understand there's going to be divisions in the Democratic caucus", Virginia's Warner said.

Even former MA congressman Barney Frank, a Dodd-Frank co-author, concedes "that his bill was too harsh on smaller banks, which are struggling with regulatory burdens while the big banks can deploy an army of attorneys to ease compliance". Drafting the letter were Ally Financial, American Express, Bank of the West, BBVA Compass, BMO Financial Corp., Citizens Bank, Comerica Bank, Fifth Third Bancorp, Huntington Bancshares, KeyCorp, M&T Bank Corp., Regions Bank and SunTrust Banks Inc. Bloomberg said some of the losers in this deal include Capital One Finacial and PNC Financial Services Group.

"The question I would pose is: 'Why are we doing this?' With bank profits at or near all-time highs, lending rebounding since the crisis, I'm not sure what problem the bill is trying to solve", said Gregg Gelzinis, research assistant for economic policy at the Center for American Progress, a left-leaning think tank.

As the bill stands now - and its language could change if the big banks' lobbying efforts are successful - the largest banks would still be subject to the Federal Reserve's stress tests. Four years after the passage of Dodd-Frank, the number of small banks, which provide almost half of the banking industry's small business loans despite holding less than 20 percent of its assets, had declined by 14.1 percent. He, like some others, have pushed to adjust Dodd-Frank needs some adjusting.

Back in 2010, nearly all the Senate Democrats voted for Dodd-Frank, but now some have changed their minds as the party faces a tough midterm this year.

But he still feels like lawmakers have a lot more work ahead of them.

"Our banks do not threaten USA financial market stability, and we should not be subjected to the same regulatory regime as larger banks with more complex and interconnected business models", the banks added.

"This election has nothing to do with this", said Senator Jon Tester, Democrat of Montana. All three face re-election in November.

But unlike Warren, numerous measure's Democratic co-sponsors hail from rural states won by President Donald Trump. Mike Crapo, the Republican chairman of the banking committee, and several Democratic members on the committee.

Frank also said that he'd rather have these three senators "vote for the legislation and get reelected in November than vote against it and lose".

You know what shocked me, though?

"I'm very anxious about the consolidation of the banking industry in Virginia", said Kaine, who was Hillary Clinton's running mate in 2016 and who describes himself as a "huge" supporter of Dodd-Frank.

But to no one's surprise, Sen.

"Congress's appetite for pulling back bank regulations shows the renewed clout of the financial sector in Washington, not just in the GOP but also among Democrats".

Sen. Elizabeth Warren arrives on Capitol Hill in Washington, D.C., March 1, 2018.

"At this point, we make too many business decisions based on regulations versus serving the client", bank president Larry W. Myers said in a statement.



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