Senate Banking Committee Approves 'Modest' Regulatory Overhaul Bill
A bipartisan coalition among members of the Senate Banking Committee defeated myriad amendments and approved a regulatory overhaul bill that even supporters said was “modest.”
“It’s a good solid modest start,” said Sen. John Kennedy (R-La.)
The bill, S. 2155 has the support of credit union trade groups, and it is sponsored by ten Republicans and ten Democrats.
The committee approved the bill, 16-7. It is not clear when the bill will go to the Senate floor.
Senate Banking Chairman Mike Crapo (R-Id.) hammered out the legislation with a group of moderate Democratic Banking Committee members after talks with the panel’s ranking Democrat, Sherrod Brown of Ohio broke down.
Kennedy and other senators said the bipartisan group that wrote the bill had agreed to oppose all amendments to the measure.
“We’ve agreed to link arms,” said Sen. Mark Warner (D-Va.).
Republicans did not offer any amendments to the bill, while Democrats concentrated many of their amendments on increasing consumer protection rules they said protect servicemembers and student borrowers.
“The reforms in this bipartisan bill help tailor the current regulatory landscape, while ensuring safety and soundness and relieving the burden on American businesses that are unfairly being treated like the largest companies in our economy,” Crapo said, as the markup began.
Crapo said some Republicans had amendments they would have liked to offer, but he requested that they not pursue them because the bipartisan group could not reach agreement on them.
Brown said he opposed the measure.
“This bill makes changes to help some of the largest banks in this country -- and the world -- while rolling back some of the protections put in place after the Great Recession to protect homebuyers and homeowners,” Brown said.
The legislation includes a credit union-specific provision that provides that a one-to-four family dwelling that is not the primary residence of a member will not be considered a member business loan under the Federal Credit Union Act.
Another section of the bill “provides that certain mortgage loans that are originated and retained in portfolio by an insured depository institution or an insured credit union with less than $10 billion in total consolidated assets will be deemed qualified mortgages under the Truth in Lending Act (TILA) while maintaining consumer protections,” according to a summary of provisions released by the senators.
The bill also would increase the so-called “too big to fail” threshold from $50 billion in assets to $250 billion in assets. Those institutions are the ones targeted for the toughest regulatory scrutiny.
The legislation is far less broad than House-passed legislation that would overhaul much of the Dodd-Frank Act. That legislation, written by House Financial Services Chairman Jeb Hensarling (R-Texas) received no Democratic votes in the House and would not gain the 60 votes needed to pass the Senate.
On the other hand, Sen. Brian Schatz (D-Hi.) predicted the Crapo bill will gain a filibuster-proof majority in the Senate.