The House of Representatives approved Tuesday a bill that loosens the post-financial crisis Dodd-Frank regulations on small and medium size banks, sending the legislation to President Trump in a rare show of bipartisanship.
The bill, which passed 258-159, exempts small lenders from much of the Dodd-Frank regulatory burden and raises the asset threshold at which medium-size regional banks face stricter regulations, in the first substantial change to the 2010 law.
The bill, which disappointed many Republicans hoping to entirely dismantle the main pillars of Dodd-Frank, now moves to Trump’s desk for his signature, providing him the opportunity to make good — at least in part — on his vow to “do a big number” on the post-financial crisis regulatory regime.
Supporters of the relaxed regulations claim they will spur increased lending and result in economic growth, while detractors argue they represent the first step in a backslide toward the regulatory environment that allowed the financial crisis to occur.
“For far too long, far too many people in our country have struggled to make ends meet,” Representative Jeb Hensarling, chairman of the House Financial Services Committee, said in a statement. “They’ve struggled to buy a car; they’ve struggled to buy a home; they’ve struggled for their version of the American dream. But today, that changes.”
Representative Maxine Waters (D., Calif.) cast the legislation as another hand out to Wall Street at the expense of the working class. The bill “benefits Wall Street and the nation’s largest banks, which are posting record profits,” Waters said.
The bill will free some two-dozen regional banks from strict capital requirements and other regulations by raising the threshold at which those rules are implemented from $50 billion to $250 billion in assets.
Another hotly contested central feature of the legislation exempts small mortgage lenders from certain data-reporting requirements — a concession progressive critics argue will detract from regulators’ efforts to police racial discrimination in lending.