Published: Sun, May 27, 2018
Finance | By Claude Patterson

Trump signs bill easing post-2008 crisis restraints on banks

Trump signs bill easing post-2008 crisis restraints on banks

"This is all about the Dodd-Frank disaster, and they fixed it or at least have gone a long way to fixing it", Trump said at the signing ceremony. That reduces the number of banks automatically subject to Dodd-Frank's enhanced supervisory regime from 38 to 12. Wall Street banks like Citigroup Inc. and JPMorgan Chase & Co. also lost out on getting relief from some capital requirements they lobbied to include. Backers of the legislation are intent on loosening the restraints on them, asserting that would boost lending and the economy.

On Tuesday, the House of Representatives voted 258 to 159 to repeal the Act, following the Senate's endorsement of the changes earlier this year. The lack of partisanship in the House was in sharp contrast to the Senate vote in March, when 16 Democrats and one Independent joined Republicans in voting for the bill.

With a House vote on Tuesday, Congress sent to Trump a bill dismantling a chunk of the rules framework for banks that was created to prevent another financial collapse.

Even though the bill rolls back parts of the Dodd-Frank Act, it doesn't completely undo the 2010 measures.

Tenney's opponent, Democrat Anthony Brindisi, said the rollbacks give too much freedom to banks close to meeting that $250 billion dollar-threshold.

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.

The Dodd-Frank act, named after its co-authors, Democratic Sen. "I am proud to see Republicans and Democrats working together to expand consumer access to credit, strengthen consumer protections, and bolster the local financial institutions that make our communities strong".

The win on the banking bill adds to Trump's marquee business-friendly legislative achievement, the sweeping tax bill enacted late a year ago that deeply cut taxes for corporations and wealthy individuals and offered more modest reductions for most ordinary Americans.

Nearly a decade after the financial crisis gripped America, the Trump administration introduced one of the most substantive changes to banking regulation in recent years on Tuesday. The smaller banks are now no longer subject to stress tests.

Supporters of the bill say Dodd-Frank was too blunt an instrument in response to the financial crisis, hurting smaller lenders that played no role in the debacle.

"This is truly a great day for America", the president said. The test assesses whether a bank has a big enough capital buffer to survive an economic shock and keep on lending.

He predicted it would usher in an economic boom for small businesses. The bill also updates mortgage loan data reporting requirements for most financial institutions and would require credit reporting companies to provide free credit monitoring services.

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